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Tuesday, September 22, 2020

Explained Ideas: 4 reasons why farmers are feeling cheated by the govt’s policies

Each of the poverty alleviation programmes for the rural poor seem to be funded by the poor themselves, writes Ajay Vir Jakhar.

By: Explained Desk | New Delhi | Updated: September 13, 2020 11:27:54 am
india lockdown, coronavirus news, india economy, india gdp, india economic growth, india agriculture and allied sector, india rural economyA farmer walks down the road with his camels during the nationwide lockdown, imposed in the wake of Covid-19, in Madhya Pradesh, on March 31, 2020. (Express Photo: Gajendra Yadav)

In his latest opinion piece in The Indian Express, Ajay Vir Jakhar, chairman, Bharat Krishak Samaj, has written that “it appears the PM is in the dark about the delivery of his government’s policies, just as the Congress leadership seems clueless about issues on the ground”.

He points out four specific pain points that unmask the gap between policy and impact on the rural economy.

Under PM Kisan, each landowning farmer (landless are excluded) receives Rs 6,000 annually. A farmer growing a combination of paddy and wheat utilises about 50 litres of diesel per acre. Today, each litre of diesel gets taxed at about Rs 45. So a small five-acre farmer could be paying about Rs 6,000 as diesel tax, the same as the largesse being received. Additionally, farmers are paying GST on purchase of inputs like seeds, pesticides, fertilisers, tractors and implements and such others for which, unlike industry, they cannot claim input credit.

Second, even though oil prices have reduced from $60/barrel to $40 after the Covid pandemic, the price of a subsidised gas cylinder to the underprivileged in the villages under the Ujwala scheme went up from Rs 503 to Rs 611.

“Incredibly, the government is collecting more per cylinder from the poorest sections of society when it is popularly perceived to be providing increased financial support to them. Broadly, each of these poverty alleviation programmes seems to have a recurring theme — being funded by the poor themselves,” writes Jakhar.

Third, earlier this year, amid the COVID clampdown, the MSP for paddy was increased by 2.9 per cent. But even the food inflation in cereals for 2019 was 8.4 per cent. It means, in real terms, the MSP for paddy will decrease by the time of marketing in October.

“In 2018, in the run-up to the 2019 parliamentary elections, the government magnanimously raised MSP for paddy by 12.9 per cent. Having attained a resounding victory, thereafter the increases in MSP have been minuscule at 3.7 per cent in 2019 and 2.9 per cent in 2020,” he states.

Also read | Explained Ideas: What can India do to address negative GDP growth?

Lastly, one can find policies continuing during COVID times emanating in ministries other than agriculture which impact the food value chain and are counterproductive and conflicting. “For example, 75 per cent of the dal consumed in India is channa and arhar. While both are selling below MSP, import duties on masoor dal were reduced by two-thirds to 10 per cent because there was a demand for it in one part of India”.

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