Dr Ramesh Chand, Member [Agriculture], NITI [National Institute for Transforming India] Aayog – the new incarnation of erstwhile Planning Commission – has reiterated that prime minister’s commitment to double farmers’ income by 2022 is doable. The average income of a farmers’ family in India is about Rs 6400 per month, but the variations across states are huge. For instance, in Punjab the average income is a high of Rs 18,000 per month, in Bihar, Odisha and Jharkhand, it is less than Rs 5000 per month. This may point towards the possibility of increasing farmers’ income manifold [even more than 100%]. If, farmers of Punjab can do it, there is no reason why those in other states cannot come up. But,...
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Category: Procurement, handling & distribution
Food subsidy – reining in bogus claims alone is not reform
According to the medium-term expenditure framework [MTEF] statement recently released by the finance ministry, the food subsidy bill of the union government is projected to increase from Rs 145,000 crore during the current year to Rs 175,000 crores during 2018-19 and further to Rs 200,000 crores during 2019-20. This comes as a big disappointment to all those who have been anxiously looking forward to Modi – government deliver on its reforms agenda especially in regard to food subsidy which is a big resource guzzler – next only to interest payments and pension. Considering that such an assessment [steep increase] is being made less than two years before its term comes to an end implies that no reform is in the...
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Contract farming – enabling environment needed
In his budget speech [2017-18], finance minister, Arun Jaitley had announced union government’s decision to bring a model contract farming Act with the intent to protect farmers from price volatility by ensuring guaranteed price for their produce. As a follow up, a draft legislation has now been released for comments from stakeholders including farmers. The latter have been given 30 days to give their suggestions. Thereafter, a final`model’ contract farming Act is expected to be released in November after incorporating the suggestions. This will serve as a guide for states to bring required legislation. Because of the heavy dependence on rainfall [70% of the cultivated area is rain-fed and even for balance 30% under irrigation, rainfall is a crucial factor...
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Farmers not yet out of middleman’s clutch
The Indian agriculture scenario is known for continued impoverishment of the farmers arising due to vagaries of nature on the one hand and poor realization from selling their produce on the other. Ironically, low price paid to the farmers does not translate in to low price for consumers either; instead, the latter pay high price. If, both farmers and consumers are losing then, without doubt, it is the middleman who is making gain. The middleman/trader exploits every conceivable situation, be it surplus production or shortage to his advantage. Recent developments in Madhya Pradesh [MP] in regard to supply and prices of onion and tomato bear ample testimony to this harsh reality. Early this year [January-February], farmers in the state were...
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INDIA’S PULSE DILEMMA
While the Government has done its bit to boost the output of pulses, it has done little to check the nexus between politicians and grain traders For several decades, production of pulses in India has fallen substantially short in terms of consumption. This persistent deficit has led to intermittent bouts of spike in prices as imports (needed to plug it) have often come after lag and have failed to reach consumption points in time — courtesy: Handling, storage and transportation bottlenecks. Pulses are an important source of nutrition, especially for vegetarians. It is also a critical component for the diet of the poor. This nutrition-poor link, which is juxtaposed with hike in price, has also been exploited by opposition parties...
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Unholy politician-trader nexus – behind farmers plight
For several decades, production of pulses in India has fallen substantially short of consumption. The persistent deficit has led to intermittent bouts of spike in their prices as imports [needed to plug it] have often come after lag and failed to reach consumption points in time – courtesy, handling, storage and transportation bottlenecks. The import of pulses in large quantity also resulted in huge outgo of foreign exchange exacerbating balance of payment problems especially during times when the macro-economic fundamentals were weak [for instance, during early 90s and 2012-13/2013-14]. This also affected the ability of the government to remain glued to the path of fiscal consolidation. Pulses are an important source of nutrition especially for vegetarians and a critical component...
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Yogi – Modi onslaught on poverty
The just concluded assembly elections in Uttar Pradesh [UP] were fought in the backdrop of deteriorating law and order situation, hostile environment for investment, crumbling infrastructure [sans a few pockets in urban areas], widespread farmers distress, their high level of indebtedness and acute shortage of bare necessities viz. home, food, education, health, water and electricity. The poor investment climate and pathetic law and order discouraged industrialists and businessmen from setting up factories/shops even as existing establishments were facing closure. Together with farming being un-remunerative/losing proposition, this made a deadly cocktail leading to large-scale loss of jobs and in turn, migration of youth en mass to other states such as Maharashtra and Gujarat. Promises galore BJP led by Modi promised liberation...
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Food subsidy reform – unlikely in Modi’s term
The National Food Security Act (NFSA) enacted by the then UPA – government in 2013 guarantees availability of 5 kg of cereals per person per month at Rs 3 per kg rice, Rs 2 per kg wheat & Rs 1 per kg coarse cereals to 67% of India’s population (75% rural & 50% urban). This is an astounding admission that six-and-a-half decade after independence, nearly 800 million of country’s population are so poor that food has to be supplied at close to ‘zero’ price. Subsidy is financial supports given by government to enable a person buy a commodity or service which he cannot afford with his limited income. As a matter of prudent policy, this should be given for a...
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Vanishing food stocks and bleeding banks
For the first time ever in the history of food procurement, storage, movement and distribution by state agencies, India has faced an unprecedented situation of hibernating food stocks worth Rs 20,000 crores in Punjab. The stocks were mostly funded using cash credit taken from a consortium of public sector banks [PSBs]. In an equally unprecedented move, the Reserve Bank of India [RBI] – the regulator of banks – has directed concerned PSBs to declare the mentioned loan as non-performing assets [NPAs] and accordingly make a provision of 7.5% during the quarter ending March 31, 2016 and another 7.5% during Qr ending June 30, 2016 for now. That adds to Rs 3000 crores [15% of Rs 20,000 crores] and will correspondingly...
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LOOKING AFRESH AT FARM SECTOR
The Modi Government has taken a slew of measures to double farmers’ income by 2022. However, for these efforts to succeed, State Governments must cooperate, as the real action can only take place at the ground level Prime Minister Narendra Modi’s objective to double farmers’ income by 2022 is being looked upon with scepticism. Critics argue that this will require an agricultural growth of more than 10 per cent per annum, at a time when growth in agriculture has collapsed to less than half a per cent per annum. Critics also argue that the minimum support price has risen only marginally (around four per cent) under the Modi dispensation. Both arguments are flawed. First, a number of States such as...
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