Agriculture

The Indian Farmer is Suffering and Desperately Needs Help

Drought conditions in parts of India in 2012. Photo: Pushkarv/Wikimedia Commons

Drought conditions in parts of India in 2012. Photo: Pushkarv/Wikimedia Commons

As India stares at the fourth consecutive drought year, the prospect of a negative growth in food grain production seems real for 2015-16. Agriculture economist Dr.Ashok Gulati says this is the first time in over 100 years that India faces four back-to-back drought years even as the Met department has further lowered the monsoon coverage to 16% below the long term average for this year. Large parts of Maharashtra, Karnataka and Andhra are already reeling from severe drought and recent estimates show even Eastern UP having over 45% below average rainfall. This has serious consequences for the farm economy as well as for rural demand, which has a profound effect on economic growth. The worsening state of the farmers has also become an issue in the Bihar elections.

Situation is serious

Gulati, who advises NITI Aayog on agriculture, says the NDA government is not fully grasping the seriousness of the situation. “I have personally visited some of the drought affected areas and the situation is so grim that in some states there could be over 20% decline in food grain production. In large parts of the country the farmer has got negative returns”, he says. He warns if the government does not come up with a sustained incentive structure for the farmers, India could slip back to the era of food shortages experienced in the 1960s.

Remember Prime Minister Narendra Modi had explicitly stated in his election campaign that farmers would be the NDA’s priority and the government would ensure they got 50% returns over their total costs. According to data collected by the government, farmers have got negative returns on many agricultural produce. There is a small positive return of 6.5% on paddy, and this too only in states like Punjab and Haryana where the MSP system works well. In eastern states, where the MSP system is very weak, farmers have had to sell paddy at 10 to 15% below cost of production. The Commission for Agriculture Costs and Prices (CACP) collects countrywide data on cost to the farmers product-wise and the prices received by them via the Minimum Support Price system put in place by the government. As per calculations by Ashok Gulati (see table) on many items farmers’ returns are either negative or just single digit positive.

Crop Cost (Rs/qtl). projected by CACP MSP (Rs/qtl) Profit over cost (%)
Paddy 1324 1410 6.5
Hybrid Jowar 1929 1570 -19
Bajra 1154 1275 10.5
Ragi 2069 1650 -20
Maize 1223 1325 8.3
Tur 4272 4625 8.3
Moong 5025 4850 -3.5
Urad 4483 4625 3.1
Groundnut 4195 4030 -4
Sunflower seed 4114 3800 -8
Soyabean 2418 2560 7.5
Seasamum 5189 4700 -9.5
Nigerseed 4068 3650 -10
Cotton 3767 3800 0.9

Low minimum support prices

Another revealing data is that Indian government this year is offering $226 per tonne as minimum support price for wheat whereas Pakistan, with similar agro-climatic conditions, is giving about $320 dollars per tonne for wheat. In Indian rupee terms India is offering about Rs.1400 per quintal and Pakistan Rs.2000 per quintal of wheat. Ironically, the price offered by the Pakistan government to its farmers approximates the promise Narendra Modi made during his election campaign which is part of the BJP manifesto—50% profit margins over cost of production.

The NDA did not keep its promise to the farmers because its in-house economists—Dr.Arvind Subramaniam and Dr.Arvind Panagaria—warned that higher price for farmers could fuel another bout of food inflation. But this advice was given sometime November last year when the finance ministry came out with a mid-term review of the economy. Since then soft commodity prices have crashed over the past nine months, the situation has qualitatively changed and other countries have recognized that farmers need to be paid their due, if only to keep food production up and maintain food security for its people. Even China is paying its farmers $385 per tonne (Rs.2500 per quintal) for wheat compared to India’s Rs.1400 per quintal!

Clearly, this is the biggest failure on the Modi government’s part to keep its promise made explicitly in the BJP manifesto. This will come surely come to haunt the NDA in a year of drought and unabated suicides by farmers in many parts of India.

The larger crisis in agriculture is also visible in the macro picture. Agriculture growth was projected at 4% in the 12th five-year plan (2012-13 to 2017-18). So far, because of the successive drought years, agri-growth has slumped to about 1.7% annually. A negative growth in food production this year could further aggravate the situation. Narendra Modi and his economic managers clearly need to bring back focused attention on agriculture and farm distress. This may be required even for BJP’s political survival.

  • NARENDRA M APTE

    (1) Although I am not from a
    community of agriculturists, I wish to join this debate on farming crisis in
    India. (2) I believe that small farmers, with holdings of less than ten acres in
    un-irrigated areas, and with holdings of less than 5 acres where irrigation is
    available, should be the focus of attention of all State governments as also of
    the Central government.. But unfortunately, today no one seems to be concerned about
    these small farmers’ distress. (3) Farmers’ distress, unprofitable farming
    activity on account of un-remunerative prices of farm produce, farmers’ growing
    indebtedness and their suicides have a close inter-relationship. But except for
    payment of some compensation to the families of those who commit suicides, most
    of State governments have not taken any remedial measures to deal with basic problems
    of the small farmers, some of which are mentioned in this article. (4) Here, I also wish to say that payment of enhanced
    monetary compensation to families of farmers who commit suicides, as announced
    by Telangana government recently is only a temporary solution. It is just like
    some bandage work where surgery is need of the hour. (5) A committee formed by
    the Central government headed by agricultural scientist Dr Swaminathan had made
    several suggestions in the past. An important suggestion the said committee made
    related to conservation and climate-resilient farming. In the US Farm Bill, for
    instance, the largest amount of money goes to conservation farming, soil
    conservation and conservation of bio-diversity. Hence the said Committee had
    suggested that our governments, both Central & State, should provide financial
    and technical support to climate-resilient farming, with the use of new
    technology that helps minimise loss through changes in temperature.

  • ashok759

    One issue that the government should think very seriously about, long term, is what climate change has already started doing to greatly exacerbate the vagaries of the monsoon. Think of the average farmer, with three or four acres of land, more often than not rainfed, and how difficult it will be for him to deal with scanty, poorly distributed rain, storms when his grain is ripening in the field just before harvest. We have witnessed so much damage in the last one year itself.

  • Mr.Nookala Raghu Ram

    Why we failed in miserably protecting our farming sector? Netas always talks on how much we should pay on a head of a farmer who suicedes. The more compensation you demand, you are doing great favour to the farmers. Is it the right policy? Who are answerable for the poor, pity, awkward, bad, week and ugly status of a Indian Farmer? Like IPM and IDM for crops, Integrated Welfare Managment – IWM system should come to protect and honour the farmer….. Any body hears???……………… raghu ram

  • HUMA SAJJAD

    As you have mentioned that Pakistan and China is meeting the farmers needs of cost and prices according to the Indian Prime Minister Mr. Narendra Modi,s statement of NDA,s priority.But India is still suffering from Agricultural issues like drought, ill climatic and weather conditions,which is actually perhaps a sign of food scarcity leading to the farm distress.ore it may be a calamity for on going years.i think Indian Government should deal this issue with a very seriousness and as a first priority to the this Sector.As “Agriculture is our wisest pursuit”,because it will in the end contribute most to real wealth, good morals and happiness.”(Thomas Jefferson from Washington 1787).

  • Mr.Nookala Raghu Ram

    Divide and rule. Why we have to categorise farmes into small, medium,big etc.,?? We have to protect all the farmers who are doing agriculture irespective of their cast, creed, location and status. We are strongly influenced by western systmes. Still to day. Status of agriculture is different from country to country. When there are great variations in the status of farmers from state to state in India, how we can cut and copy the systems of other countries. Since Independance, proper analisation was not done about the problamatic status of Indian farmer. Many committees were installed and they submitted their reports and recommendations. But seems in depth investigation was not done. We should have State level committies not Country level commity. It should be with a mix of experts, who can assess the problem at root level. Scientists who have authority on the genetics, breedings etc., may not have knowledge on root level problems. Then, one is in a position to provide solutions for this burning problem. ………… raghu ram

  • Jagadhieshwar Reddy Ganga

    Yes, India is going through tough crisis on farming as there are no rains and unexpected flooding. Especially in Telangana, situation is worst where the fields starving for water. Farmers becoming poor day by day even though there are lots of subsidies provided. We should support farmers and help the needy. @ http://agrifarming.in