This is where the problem lies. The 27-page long chapter on the economics of a plate of food in India, which according to the Economic Survey 2020 is an attempt to quantify what a common person pays for a thali across India, only leads us to one conclusion: the cost of producing cheap food on the plate is being borne entirely by farmers.
“What better way to make economics relate to the common person than something that s(he) encounters every day – a plate of food?”says the introduction to the chapter. Sounds interesting, isn’t it? After all, Thalieconomics, as the chapter is titled, makes an effort to show case to the urban educated how the economic policies have been able to effectively keep food inflation under control thereby keeping their household budget within means. But in the bargain, it very cleverly hides the misery that millions of farmers who produce that cheaper food are living with.
Only four years back, the Economic Survey 2016 had pointed to the miserable condition of farmers. Accordingly, the average farm income in 17 States of India or roughly half the country was a meagre Rs 20,000 a year. In other words it means that a farm family was somehow surviving on less than Rs 1,700 a month, which I have often argued is not even enough to rear a cow. This in reality is the hidden cost of producing cheaper food. To keep the consumers visibly happy, the entire burden has been very conveniently passed on to farmers. In reality, it is the producer who is actually subsidising the consumer, a fact that policy makers simply want to ignore.
But before we dwell any further, let’s first look at what Thalieconomics intends to convey. Trying to address the questions that often crops up at ‘dinner table conversations in Lutyens Delhi or in roadside Dhaba in the hinterland’ the Economic Survey 2020 goes into an elaborate statistical exercise to bring out how over the years the vegetarian thali as well as the non-vegetarian thali has become easily affordable. It uses the National Institute for Nutrition (NIN) dietary guidelines and data from Consumer Price Index (CPI) for Industrial Workers from around 80 centres across the country to construct the average price of a vegetarian and non-vegetarian thali. Assuming that an average household of five consumes two thalis a day, Thalieconomics tells us that while an average household saved Rs 10,887 per year on vegetarian meals and for the non-vegetarians the gain was Rs 11,787 per year.
The gain is not as big as the Economic Survey 2020 wants to convey. Even after such a meticulous statistical exercise – which even goes to the extent of calculating the cost of ingredients like spices that are used in preparation of sabzi, dal and non-vegetarian items -- what comes out is that post 2015-16 the average gain is merely Rs 3 per thali. To make it look big, this figure was multiplied with the average number of persons in a household and the number of days in a year to present a respectable annual saving figure for a family. Based on the average yearly increase in salary of an industrial worker, it tells us that the affordability of a vegetarian thali between 2006-07 and 2019-20 has increased by 26 per cent and the non-vegetarian thali by 18 per cent.
Now where the Economic Survey 2020 has gone wrong is to attribute the increasing affordability of a thali to ‘many economic reforms measures introduced since 2014-15 to enhance the productivity of the agricultural sector as well as the efficiency and effectiveness of agricultural markets for better and more transparent price discovery’. If this was true, I see no reason why farmer protests across the country should be growing. In 2014, the National Crime Record Bureau (NCRB) had recorded 687 farm protests; increasing to 2,683 in 2015, and further surged to 4,837 in 2016. Just in two years, farmer protests had grown by seven times. Even thereafter, although no official data is available, the number and intensity of farmers’ protests have only multiplied. Remember the peaceful long march in Maharashtra? Remember recurring events of farmers dumping tomato, potato and onion on the streets?
If agricultural markets had performed efficiently leading to a better price realisation, the Chief Economic Advisor (CEA), under whose guidance the Economic Survey is prepared, should explain how and why farm incomes have been on a downhill path crashing down to a 14-year low in 2018. Consumer food price index the same year had come down to minus 2.65 per cent. When food prices decline, the policy makers rejoice but it is the farmers who suffer the devastating consequences of a drastic slump in incomes. After all, they too have families to support. They too have to meet the household expenses, maintain their livelihoods and let’s not forget they have the same kind of aspirations as the people in the cities. But denying them a rightful price for their produce and that too year after year is what has led to a deepening agrarian crisis. As I have always maintained, when a farmer undertakes crop cultivation what he does not realise is that he is actually cultivating losses.
Instead of a theoretical construction of the economics of a thali, Economic Survey would have done a greater justice by focusing on the terrible agrarian crisis that prevails. It could have at least made an attempt to understand how farmers have been actually subsidising the national economy. An OECD-ICRIER study for the period 2000-01 to 2016-17 has shown that while farmers got low prices, suffering a cumulative loss of Rs 45-lakh crores in 16 years, the consumers gained by paying 25 per cent less for food. While farmers incurred a loss of about Rs 2.65-lakh crore every year to ensure that urban consumers could afford a cheaper thali, the reason why agriculture is in a severe crisis becomes crystal clear.
To keep food prices low, farmers are actually being penalised to grow food. It is high time appropriate income support policies are put in place to compensate farmers for the low commodity prices. #
"Thalieconomics' gets it wrong. The Tribune. Feb 8, 2020
0 comments:
Post a Comment