CHENNAI: Demonetisation, announced on November 8 last year, brought in its wake a near halving of farmers’ kharif season income. Now, just three weeks short of its anniversary, farmers are once again facing an income crisis.
According to data from the Union Agriculture Ministry, while prices for paddy, jowar and ragi are relatively better placed than the minimum support price (MSP) announced by the central government for the 2017-18 crop year, prices for many like Green gram (moong), Black gram (urad), soyabeans, sunflower seeds, bajra and groundnuts are commanding significantly lower rates.
For example, in Telangana’s Khammam market, moong was selling at around Rs 3,300 per quintal (modal price) on October 13, 40.8 per cent lower than MSP (plus bonus) announced. In Akola, Maharashtra, it was selling at Rs 4,625 per quintal, 17.04 per cent lower. The situation is similar across many major markets.
MSP is the minimum price guaranteed by the government for public procurement—meant to protect farmers from bearing the brunt of nosediving prices, at which point the government can procure produce at MSP. NAFED has already begun setting up more procurement centres, but, experts say this will not cover all affected farmers. The Madhya Pradesh government too, has announced the ‘Bhavantar scheme’, which will see it crediting registered farmers with the difference between MSP and actual prices fetched at the Mandi.
However, MSP rates themselves have come in for criticism recently, with ratings agency Crisil stating recently that the slow growth in MSP (3.6 per cent over the last three years) has been one reason for farmer distress.
While last year, blame was largely attributed to demonetisation, things are more complicated now. For one, this isn’t caused by a domestic glut—the Centre has actually projected a lower output for most crops except black gram (urad) in its first advance estimates. “In Tamil Nadu, last year, black pepper was priced at Rs 700 per kg. On Saturday, it was being sold at just Rs 360 per kg. The irony is pepper production is lower now—from 65,000 tonnes last year to 53,000 tonnes,” pointed out D Ravindran, general secretary, Tamil Nadu Sugarcane Farmers Association, blaming ill-timed imports.
Another factor is demonetisation-led disruption to stocking habits—experts say private sector stockists are no longer willing to maintain high stock levels, limiting purchases to short-term needs. Vijay Sardana, agricultural economist, lays the larger blame on a crippling lacuna in policy-making. “There is no comprehensive national agricultural and food security policy assuring farmer incomes. Agri policy in India is currently a political activity—prices are kept low to satisfy consumers, while election season sees a flurry of short-term measures for farmers.