The pulse of the matter
Farmers tend to lose out irrespective of whether crop prices go up or down. Government needs to rectify this.
The general complaint of farmers is that everyone is willing to sell inputs to them but no one cares about the sale of their produce at remunerative prices.
The price of tur/ arhar dal had recently skyrocketed to Rs 200 per kg and the consumer as well as the government were at their wits’ end. Not very long ago, high onion prices were making everyone shed copious tears. In both the cases, there was profit maximisation by the middlemen and the sellers. But what were the gains accruing to the farmers? The additional profit, due to the higher prices of pulses and onions, has been cornered by traders with deep pockets. The farmers haven’t received much. Contrast this with the potato crop at present.
Because of a bumper production, prices have crashed. A kilogram of potato is fetching just Rs 4-5 in the wholesale market. The potato farmer is suffering despite giving a record harvest. And yet, the consumer continues to buy the potato at Rs 15-20 per kg. Something similar is happening for farmers of Basmati paddy as well. Farmers are agitating over a very low price for a particular paddy variety — Pusa Basmati 1509. Due to weak export demand, Pusa Basmati prices have fallen from Rs 26 per kg last year to Rs 13 per kg this year. It was only when the government started its procurement under the minimum support price (MSP) that the prices recovered marginally to Rs 15 per kg. In short, while farmers are the only ones to suffer when the prices of their agricultural produce go down, they never seem to gain when the prices go up.
The general complaint of farmers is that everyone is willing to sell inputs to them but no one cares about the sale of their produce at remunerative prices. The focus of all scientific and technological interventions since the Green Revolution has been on increasing production. When the production goes up, prices in the markets go down and a farmer’s net gain is nullified despite the fact that he may have incurred higher costs due to the application of improved inputs. Even cooperative behemoths like the IFFCO and KRIBHCO are only focused on selling inputs for agriculture. They have not made efforts to ensure that farmers receive remunerative prices for their produce.
The market, on its natural course to maximise profit, tries to extract the most from the farmers. As farmers are generally under debt, they are forced to sell their produce soon after the harvest, when the prices are low. With the passage of time, the prices go up and it is only the traders who gain, not the farmers. And thanks to the multi-tiered marketing structure, prices go up by the time they reach the retail outlets. Hence, the consumers do not benefit from low prices even when there is excess production. Similarly, even in years of deficit production, when the prices go up due to a shortfall, farmers do not receive higher returns.
It is, therefore, incumbent upon the state to safeguard the interest of farmers in order to ensure food and nutrition security for its citizens. Technically, the MSP for up to 25 agricultural crops is declared by the government but, in effect, procurement is conducted only for paddy and wheat.
Over time, this has led to a distortion in the production patterns across the country because the cultivation of rice and wheat is considered to be safer because of an assured market.
The production of pulses, for instance, is a good example of such distortions. For a country like India, where a large number of people are vegetarian, pulses are a key source of protein readily available. Unlike corn and paddy, a hybrid variety of pulses has not been very effective in enhancing the yield. As such, more research is required to increase the productivity of pulses. The supply shortfall in pulses is about 15-20 per cent. This can be bridged either by increasing the productivity or increasing the acreage under pulses. Substitution of arhar dal by matar dal or rajma may also be helpful. However, this requires a behavioural change at the level of farmers that, in
turn, requires a sustained campaign. Even the seed availability of pulses has been problematic. As such, there is an urgent need
for the government to intervene and augment seed availability. In the northern parts of the country, pulses cultivation also suffers from the extensive damage caused by the blue bulls. They belong to the antelope family, but farmers refrain from killing them because of their Hindi name — “neel gai” — even though governments issue licences to kill them.
A wheat-rice cycle, year after year, is damaging the fertility of the soil as well. The cultivation of pulses rejuvenates the soil by fixing the nitrogen. As there is no policy to maintain buffer stocks of oilseeds and pulses, the government is in no position to release stocks in the markets to stabilise prices when they start to rise. The creation of a reasonable sized buffer stock of pulses, through public procurement, will have the effect of stabilising prices for consumers. Moreover, pulses are largely cultivated in rain-fed areas and, as such, greater public investment in expanding irrigation facilities will further help overall productivity.
Assuring proper returns to farmers is the big question that needs to be addressed. Over 80 per cent of all Indian farmers belong to the category of small and marginal, with over 60 per cent farmers operating on land holdings less than one hectare in size. With rising prices of inputs, cultivation as a profession has become highly unattractive. Farmers still continue to cultivate largely because there is no other choice for them. The situation needs to be rectified. Farming must be made an attractive profession in the interest of the country and its citizens.
To this end, the government must distribute input subsidies directly to farmers by way of income support, since it is a WTO-compliant method. The emphasis on improving production and availability will sound hollow unless we place the farmer at the centre of our thought process.
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