How Absence of Govt Procurement Agencies Is Shrinking Delhi’s Agrarian Economy

Out of the 1,000 farmers interviewed, a majority of them said they sold their produce at lower rates, and over 90% of them said they were not aware of any government agency that procures the produce at MSP.

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Rampant urbanisation in Delhi has severely dented its agrarian economy, which is evident from the shrinking numbers.

For instance, the contribution of the agricultural sector to Delhi’s gross state value added (GSVA) has reduced from 0.94% in 2011-12 to 0.38% in 2020-21, according to the Economic Survey of Delhi 2020. The size of operational land holding has also decreased marginally from 73,000 acres during 2010-11 to 71,000 acres in 2015-16. Further, the gross cropped area (GCA) has come down to 85,000 acres in 2017-18 from 130,000 acres in 2000-01, as per the economic survey.

Shrinking size of the peasantry in the capital city hampers availability of locally grown food and the source of livelihood. The conditions of Delhi’s farming community barely attracts attention, but it holds significance in partially meeting the local demand for food and providing employment to a large population residing in its periphery.

To understand the prevailing farm conditions in Delhi, we interviewed 1,000 farmers in four districts of Delhi, viz., North, North-West, South-West and West. The study was sponsored by Delhi government’s planning department.

Major crops constitute paddy and bajra during Kharif season and wheat and mustard crops during Rabi season. In the ecologically fragile region, ground water (97%) remains the main source of irrigation. A number of factors such as increasing cost of cultivation and lack of assured procurement and remunerative prices of the produce make the situation further stressful for farmers. Only 50% of the farmers cultivated crops in both the seasons, while rest left the land fallow for one season.

The emerging crisis in the production system will have a long-term impact on the livelihood where a large number of migrants have already inflated the informal sector.

Also read: Punjab: Farmers Call off Protests as AAP Govt Agrees to Several Demands

The status of crop procurement

Wheat and mustard are mainly sold to local markets (23%) and private traders (55%) besides keeping them for self-consumption, which varies from 20-25%. Nearly, 7% of the output from paddy and bajra is kept aside for self-consumption. While 29% of the paddy is sold to local markets, 55% to private traders, 14% of bajra is sold to local markets and 68% to private traders.

The government procurement for all the crops in the region can be considered negligible. Procurement by the Food Corporation of India (FCI), plummeted to 276.5 quintal in 2020-21 from the last procurement of 17,870 quintal in 2015-16, as per their regional office in New Delhi.

Representative image. Photo: Reuters/Danish Siddiqui

Majority of the farmers said that they sold their produce at prices lower than market rates. Although there is an open auction in the mandis for the prices of the produce, farmers mostly prefer to sell to the same private traders in the Agricultural Produce Market Committee (APMC) because they are dependent on them for their financial needs. It is disappointing that even the farmers in the national capital face similar issues as their counterparts in any other region of the country.

Additionally, farmers prefer to sell the produce on the same day as they can only afford one-day expense for travelling long distance on hired vehicles. Moreover, lack of storage space for their foodgrains is another factor which compels them to sell the produce on the same day, therefore, reducing their bargaining power.

Interestingly, not all farmers are aware about the safety net that assures minimum price to their produce. As in the studied sample, nearly 60% of the farmers were aware about the current prevailing minimum support prices (MSPs) of wheat and mustard but only less than 30% were aware about MSP for paddy and bajra.

More than 90% of the farmers in Delhi were not aware about the government agency that procures the produce at MSP. Almost all of them denied selling their produce at MSP to any of the procurement agencies due to their complete absence.

All the interviewees said that the price at which they sold their produce was much less than the MSP announced by the government.

One of the mustard farmers said, “I am cultivating mustard since the last 20 years during October-March and sell it in April. In April 2021, the MSP was Rs 5,200 per quintal but I got a price of only Rs 4,200 per quintal as there was no government agent whom I could sell it to.”

While 43% of the farmers said that they had no motivation left to continue with farming, 20% were continuing the occupation only for self-consumption, and less than 35% of the farmers said they produced for the market.

Despite all these issues, Delhi farmers preferred to cultivate the land, at least for one season, rather than keeping the land fallow. Additionally, even though the farmers are facing challenges in producing at least two crops in a season, they have not altered their cropping pattern in the last many years, mainly due to the risk involved in adopting new cropping practices.

Also read: ‘Betting on Hunger’: Market Speculation Is Contributing to Global Food Insecurity

Need for a progressive policy regime for farming community

Analysing the status quo of the farmers in Delhi, it is apparent that the government needs to take cognisance of the perfunctory farming community of Delhi with active policy interventions.

The Delhi government recently announced an allocation of Rs 476 crore for the development of mandis in the national capital – which is a welcome step in the direction of improving the condition of the place where farmers come in large numbers to sell their produce. However, direct procurement by the agencies of the Union government such as FCI, as is done in other states, is needed for the farmers of the capital city. For this, there is a need to increase purchase centres and make farmers aware of their presence.

There are various channels through which states can procure directly from the farmers and even distribute wheat and rice as per the provisions under National Food Security Act (2013). As seen in decentralised procurement states like Madhya Pradesh, Delhi State Civil Supplies Corporation can procure rice and wheat directly from the farmers, store and use it for the various governmental schemes like the NFSA, ICDS, Mid-Day meal, etc. and  hand over the excess stocks to FCI, for which there is a provision for reimbursement.

Further, there is only one mandi in Delhi where the farmer has to incur huge transportation costs to bring the produce for sale. The government must either increase the number of mandis or provide farmers with transportation facilities or organise procurement camps in villages during harvesting season to cut down on their costs.

Storage facilities must be provided to farmers so that she has an option to sell her produce when the prices are competitive rather than selling off their crop as soon as harvested. And, the revival of Delhi’s sagging agricultural community clearly depends on coordination between the Union government and the Delhi government in emphasising the needs of the farmers who are already pushed to the margins.

The authors are working with the Council for Social Development, New Delhi.