Waiting for a good price
What do you expect farmers to do when open market prices fall to less than half the announced Minimum Support Price (MSP)? What should the farmers do when market prices are less than even the cost of production?
This is a question that has repeatedly hit farmers for over four decades now. This is a question that remains unanswered, agricultural economists, policy makers have failed to provide an answer. Except for half baked schemes and promises, it has been very cleverly bypassed not realising that the failure of markets to provide farmers the rightful price for the produce he brings to the market is a question of life and death for farmer and his family.
In Kota mandiin Rajasthan, against the MSP of Rs 5,600 per quintal, farmers are getting a maximum of Rs 2,000 per quintal for urad. This does not cover even the cost of production. The cost of producing one quintal of urad comes to Rs 3,428 per quintal. An estimate worked out by a local newspaper works out the total loss incurred by farmers at Rs 7-crore a day. In Punjab, farmers are not getting more than Rs 1100 per quintal for maize. The price farmers are getting is about 35 per cent less compared to an improved MSP of Rs 1,700 per quintal announced this year, which includes 50 per cent profit over the A2+FL cost (out of pocket expenses incurred by farmers plus family labour).
While reports of tomato being dumped on roadside have started appearing, the prices of almost all the early arrivals in the mandis have hit rock bottom. When prices crash at the time of harvest, farmers are left with little choice but to commit suicide or abandon farming looking for menial jobs in the cities. No wonder, 208 farmers have committed suicide in Marathwada region of Maharashtra alone in the month of June. Elsewhere too, the serial death dance on the farm continues unabated.
At the beginning of the Kharif harvesting season, prices had begun to decline. Accordingly, the prices farmers are getting are as follows:
Urad -- Rs 2000/Quintal against an MSP of Rs 5,600 per quintal at Kota;
Maize -- Rs 1300/Quintal against an MSP of Rs 1700/Quintal at Mandsaur; and Rs 1,075/Quintal in Punjab;
Moong -- Rs 5000/Qunital against an MSP of Rs 6975/Quintal at Ganganagar ;
Soyabean -- Rs 2800/Quintal against an MSP of Rs 3399/Quintal at Harda; and
Cotton – Rs 4,600/Quintal against an MSP of Rs 5,450/Quintal at Dhamnod.
This is perhaps the third year in succession when the farm prices at the time of harvest have crashed. Imagine the plight and resulting suffering it brings for the farming community. Year after year, farmers toil hard, putting his entire family to work, only to find the prices crashing when he reaches the mandi. The miserable blow that strikes the farmers, and that too despite the hard labour that he and his family had put in, results in losses and that pushes him to end his life. Imagine, for three seasons in a row farmers are incurring losses. As I said earlier, the serial death dance on the farm has gone on and on.
It is wrong to treat only a dry spell or a continuing drought or heavy rainfall as a calamity. Everything being normal, the fall in prices at the time of harvest is perhaps the biggest calamity that hits farmers. Some years back, in an interview with the World Disaster Report, I had said that a cyclone or a flood is not the only disaster that farmers face. In fact, they are quite prepared when a dry spell strikes or when a heavy downpour results in crop losses, but what catches them with a regretful shock is when the crop weather is normal and the harvest is bountiful, the open market prices crash. That’s a much bigger disaster
Some years back I had said that the travesty of farming is that a farmer does not realise that every time he undertakes crop cultivation, he actually cultivates losses.
Even under the newly rolled out PM-AASHA scheme, the government has made it clear that only 25 per cent of the marketable surplus will be procured. This will be enough for the government to build an adequate buffer to take care of the food inflation, in case it happens. But what about the remaining 75 per cent of the crop harvest? Who will bear the loss a farmer incurs in selling his produce at a lower price in the market? This is primarily because the government does not even consider agriculture to be an economic activity. The entire design of market reforms is built on exploiting agriculture, treating it as nothing more than a sector that needs to feed the population and provide cheaper raw material for the industry. The cheaper the raw material, the more such inefficient markets are applauded. The more the markets exploit farmers, the more they are considered to be efficient.
The better option is to redesign the existing Commission for Agricultural Costs and Prices (CACP), which presently works out the MSP for different crops. It should be renamed as Commission for Farmers Income and Welfare with the mandate to work out the minimum living income for a farming family, and to spell out mechanisms to achieve it. Even if we take the minimum income that a farmer should receive to be equivalent to minimum wage for the lowest employee, at Rs 18,000 per month, the Commission must work out the average that a farmer earns in a region, and then ensure that the deficit with the benchmark laid out be paid by way of income transfer. The Telengana model, where a fixed amount of Rs 8,000 per acre is paid to every land-owning farmer, is a form of income transfer, and this should be clubbed by the Commission to provide direct income support to farmers. #
सूखा या बाढ़ नहीं, किसान के लिए सबसे बड़ी त्रासदी है माटी मोल कीमतें. Gaon Connection Oct 3, 2018
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