Farmers’ distress needs structural solutions
The election season has riveted the attention of political parties on the farming community. Parties are trying to outdo each other in offering sops to farmers. The BJP-led Union government has announced its largest-ever increase in the minimum support price of wheat.
It is also giving a cash transfer of Rs 6,000 to landholding farming families under the Pradhan Mantri Kisan Samman Nidhi. The Opposition is trying to better the BJP’s offer. In Telangana, the ruling Bharat Rashtra Samithi offers Rs 10,000 to farming families under its Rythu Bandhu scheme; It has now promised to raise it to Rs 16,000 in steps. The Congress has promised Rs 15,000 to all farmers and added Rs 12,000 to agricultural labourers under its own Rythu Bharosa scheme.
Similar offers of cash support, loan waivers, free electricity and higher support prices are being showered in other states, too. These schemes underline the agricultural distress prevailing across rural India.
About half of India’s population is engaged in agriculture. This part is facing severe hardship due to higher input costs, climate change, lower prices and, above all, the lack of long-term solutions to their recurring problems. Governments have resorted to knee-jerk reactions.
The recent decision to fix the minimum export price for basmati at $1,200 a tonne is a case in point. This decision would put Indian farmers and traders at a disadvantage in the highly competitive international market. Similar was the case of export restrictions on wheat. According to the Indian Council for Research on International Economic Relations, the government’s decision to dump its wheat stock in the open market earlier this year to rein in food inflation made farmers lose an estimated Rs 40,000 crore. The loss would more than double if last year’s wheat export ban is taken into account.
Political parties focus on temporary reliefs rather than structural issues. India needs to create a competitive and sustainable farm sector for achieving food security and improving rural incomes. It is among the largest producers of milk, pulses, spices, wheat, rice, cotton, sugarcane, fish, fruits, vegetables, tea, and some meats. To be a part of the global supply chain, it needs to create storage systems.
Recurring scenes of farmers dumping their produce on the streets are symptomatic of policy failure. The government needs to guard farmers against the vagaries of climate and price through longer-term policy interventions.