Tag: Rural distress

Punjab Farmer With Wheat Crop

Crop Diversification May End Farm Distress

By Kunal Bose
A diversified cropping pattern will help in mitigating the risks faced by farmers in terms of price shocks and production/harvest losses

If a country’s chief executive does not have an economics background and is not counselled by academically sound economists then he will be prone to making ambitious announcements which are more likely than not to run aground. More in an attempt to diffuse the growing unrest among farmers resulting from their not receiving right prices for their crop almost every planting season condemning them in growing indebtedness, Prime Minister Narendra Modi made a promise in February 2016 that the government would ensure doubling of income from cultivation by 2022.

This is more easily promised than likely to be redeemed. Ahead of the start of the two sowing seasons, the government will announce minimum support prices (MSP) for 14 kharif (summer cum monsoon) crops and 8 rabi (winter) crops. All this besides, New Delhi will require of sugar factories to pay ‘fair and remunerative price’ (FRP) for sugarcane, revised every season (October to September) on recommendations of the Commission for Agricultural Costs and Prices (CACP). The government has asked CACP to fix MSPs in a way as to ensure that farmers get at least 50 per cent higher than cost of inputs such as seeds, fertilisers and irrigation water and also unpaid value of family labour.

Whether the growers are getting MSP or are forced by circumstances to sell their crops below minimum prices, the government helped by largely an unquestioning media along with a huge publicity campaign could create a myth that finally deliverance had come for Indian farming community. In an ideal situation, farmers should see MSP as sovereign guarantee. In case they fail to realise MSP in the open market, they should be able to turn to official agencies to dispose of their crops at government guaranteed prices.

An on the spot survey carried out by Jai Kisan Andolan (JKA) a few months ago coinciding with kharif output arrivals in the market shows that on average the farmers were selling for anywhere between ₹500 (for cereals) and ₹2,000 (for dals) per quintal below the MSP. Yogendra Jadav of JKA says: “Farmers had lost around ₹1,150 crore in the first three weeks of the marketing season as they were forced to sell below the MSP.” No wonder then, the country saw protesting farmers arriving in thousands in Delhi and Mumbai to draw national attention to their privation.

The official procurement being over the years mainly focussed on rice and wheat, it has become a given that the weighted average of mandi prices of other crops such as a number of oilseeds, maize, tur and urad would trend below MSP. A spokesperson for Crisil Research says: “Our assessment indicates that crop profitability (in the past few years) has dropped across nine of the 15 states when assessment is made of 14 key MSP crops covering over 50 per cent of the sown area. We believe the challenge for the government goes beyond fixing MSP to ensuring farmers get it by strengthening the procurement machinery.” 

Close to 50 per cent of the net cropland area of 180m hectares (9.6 per cent of global coverage) being rainfall dependent, land productivity and crop size are influenced by monsoon behaviour. No wonder then, agriculture and allied sectors growth rate fluctuated between minus 0.2 per cent in 2014-15 and 4.9 per cent in 2016-17. While there are assurances from India Meteorological Department that the country will be spared El Nino, private weather forecasting agency Skymet says the southwest monsoon has a 50 per cent chance of being normal this year. So India is likely to have a good monsoon three years in a row creating condition for a good harvest.

But celebrations of the likelihood of good rains by farmers must await the prices they would be able to realise once their next crop is in the market. A structural weakness of the farm sector is that there is an inverse relationship between farm incomes and production. Prices of farm produce and incomes of growers tend to fall in times of bumper harvest. In this context is to be remembered that despite all the extension programmes the country is having over the decades, farm productivity here for most crops remains well below the world average, not to reckon the best that obtains in places such as Israel with the most efficient use of whatever little water is available, China and the US. To give two examples: First, Indian rice yield of 2,191 kg a hectare falls way short of the global average of 3,026 kg a hectare. Second, our wheat productivity of 2,750 kg a hectare also compares poorly with world average of 3,289 kg a hectare.

India will do well to take a lesson or two from China, which with less land than us under rice and wheat has remained at the top of world chart in terms of productivity and production volume. Thanks largely to the size of our cultivable area and normal monsoon rains in most major crop producing states in the current season (July to June), India is to have food grain production of 281.37m tonnes during 2018-19 compared with 277.49m tonnes in the previous agriculture season. Rice production is to be up 4.59m tonnes to 115.6m tonnes and wheat will be marginally better at 99.12m tonnes.

With this level of production, pressure will be building on the government to procure more rice and wheat than it normally does. Not surprisingly, therefore, the current season has seen the second highest ever wheat procurement of nearly 36m tonnes. Open market wheat prices are up by nearly 10 per cent. But with wheat MSP being pegged at ₹1,860 a quintal plus a bonus available at the state level, farmers would be inclined to give his produce to official agencies. Rice procurement is likely to be a record 45m tonnes. Procurement still falls short of expectations of farmers.

At the current level of procurement, India at the opening of 2019-20 agriculture crop year in July will have stocks of 77.2m tonnes, including 47.6m tonnes of wheat and 29.6m tonnes of rice. This will then be 36.1m tonnes higher than the ideal opening inventory for a season. Even while under the private entrepreneur guarantee scheme 15m tonne of covered space capacity has been created since 2010, safe and scientific food storage still remains a point of major concern. One also has to consider the major economic cost of storing grains well over the buffer norm. Of no less concern is the substantial loss of grains that India and many other countries suffer in the course of storage.

Should not then India be laying greater stress on crop diversification, specially progressively moving land from wheat and paddy, the latter specifically in states such as Punjab, Haryana and western Uttar Pradesh where water is scarce? The 2017-18 Economic Survey says: “A diversified cropping pattern will help in mitigating the risks faced by farmers in terms of price shocks and production/harvest losses.” The Survey acknowledges that because of the enormous volume of land under cultivation, the country has “tremendous potential for crop diversification and to make farming a sustainable and profitable economic activity.” It’s time India had gone in a big way to grow high value crops, including horticulture items for which the demand is strong both within and outside the country.

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Woman Holds Narendra Modi Cutout

Is It Advantage Modi Before The Elections Begin?

By Sanjoy Narayan
Even before the first vote is cast, and campaigning reaches its crescendo, Modi is probably entering the fray with an advantage.

A few days ago, one of India’s most respected and well-known senior TV journalists posted a tweet that was telling. She was reporting from the field in Baghpat in Uttar Pradesh and her tweet said: “A commonly described refrain about @narendramodi–not Pulwama, Balakot, or PM Kisan–is “he works really hard and he isn’t gaining anything for himself” – talking to voters in Baghpat. #OnTheRoad2019”. India’s national elections are less than a fortnight away and, increasingly, the views gleaned from the ground seem to point to a public mood that favours re-electing Mr Narendra Modi, his party, the Bharatiya Janata Party, and its several allies.

Dipstick surveys of the sort that journalists often resort to—talking to local cab drivers or roadside tea stall owners is one of the commonest tactics they use—are neither rigorous nor scientific ways of gauging the pre-election mood of an electorate, at least not of one that is as diverse, complex, and confounding as that of India’s. Yet, as we head for this year’s national elections (they begin on April 11 and go on for seven phases), what people outside the high-decibel chatter on social media platforms are saying bears consideration. Mr Modi and his government appear to elicit greater levels of faith among large swathes of India’s population. So, are they headed towards an election with a definite edge over their opponents such as the Congress party or the motley crew of other parties that have been trying to forge a grand alliance to oust the BJP-led government?

When it comes to campaigning for votes Mr Modi has a clear edge over his rivals. Whatever critics say, he’s probably the best orator in Indian politics today. His speeches may be peppered with “politically incorrect” statements (recently, while speaking to students at an IIT, he appeared to be mocking Congress president Rahul Gandhi as someone suffering from dyslexia), or repetitive homilies about how his government had delivered on what it had promised, or even inaccurate accounts of things such as India’s growth, employment generation, and poverty alleviation during his regime, but his oratorical skills are clearly a huge draw among ordinary Indians who usually come out in strength to listen to him at his numerous rallies. The average Indian sees Mr Modi as a strong, hardworking leader who is honest and selfless.

A gifted speaker, Mr Modi’s rally speeches are designed to touch the heart of his audiences. He speaks to them in simple language, although he has a penchant for coining acronyms, and is usually able to create a feeling of respect, admiration and trust among them. Through his tenure, he has leveraged this talent. His monthly radio talk, Mann ki Baat, which partly crowd sources its themes, and has a potential to reach 90% of Indians, is a huge hit. He has nearly 47 million followers on Twitter and has posted more than 22,800 tweets (Donald Trump has 59.5 million and 41,000 tweets) and even though he’s faced flak for not holding a single press conference since he became Prime Minister in 2014, his alternative way of keeping in contact with people seems to have borne fruit. No one except the media complains about the PM not holding pressers.

In several polls, confidence trackers and other devices of that ilk, Mr Modi continues to be head and shoulders ahead of his rival politicians when it comes to who most people would prefer to see as the leader of their nation. In contrast, the Congress president and Mr Modi’s main rival, Mr Gandhi, is still seen as a work in progress. That may seem amusing because at 48, Mr Gandhi may be a generation younger than Mr Modi, 68, but he’s already a middle-aged man.  Mr Gandhi’s election speeches are also not remarkable. He’s not as good a public speaker. But more importantly, his speeches lack the conviction that Modi’s speeches invariably seem to have. Also, during this election season, other than the announcement of a form of universal basic income for the poorest in India, in his public utterances, there has been little of his vision for a better India.

Mr Gandhi’s party just released its manifesto for the elections, spelling out what it would do if it came to power. It was no surprise that it promised a thorough investigation into the Modi government’s deal to buy Rafale fighter jets from France—a deal that the Congress and others believe smacks of corruption. But its main focus was on creating jobs; alleviating distress among India’s farmers; and, naturally, the minimum income scheme that Mr Gandhi had announced earlier, and in which Rs 72,000 a year would be paid to the poorest 20% of households.

The BJP is yet to release its manifesto—before the last election in 2014, it had done so only very late into the campaigning period. But it would be a real surprise if that document didn’t prioritise the exact same things that the Congress’s one has. The Modi government has been perceived to be tardy on issues such as employment generation and well-being of farmers. Political prudence would dictate that these issues would feature high up on the BJP’s manifesto as well. India’s problems—particularly on the economic development front are complex and so large that no aspirant for New Delhi’s seat of power can ignore them, least of all an aspirant wanting to be re-elected.

The outcome of India’s elections—they are complex and involve various permutations and factors that influence voters’ choices—are never predictable. The size and scale of itself is massive: 820 million voters; 930,000 polling stations; 1.4 million electronic voting machines; 11 million security personnel overseeing polling over seven phases. But so is the unpredictability of the voting trends. How a party fares in populous states such as Uttar Pradesh, Andhra Pradesh (now bifurcated into two separate states), and Maharashtra could be the determinant of whether it gets a shy at forming the government. Moreover, votes are cast on the basis of many other factors that go beyond economics and the personalities of leaders. Caste and religion create blocs of voters; and India’s population of 172 million Muslims who are its largest minority have not exactly been happy in the past five years under a government led by a party whose policies have always had Hindu nationalism at its core. Recently, at one of his rallies, while upbraiding the Congress for creating the term “Hindu terror”, Mr Modi implied Mr Gandhi was contesting from an additional Muslim-dominated constituency because he was afraid of losing from his regular constituency, UP’s Amethi. In 2014, when the BJP and its allies won 336 seats out of 543 in India’s lower house of Parliament, few psephologists had been able to predict that it would be such an overwhelming win. One reason why India’s pre-poll surveys often go horribly wrong is because of the diversity and sheer size of the electorate—huge numbers of voters; and a vastly diverse population, both in terms of demographics and psychographics. In a country of 1.3 billion, sometimes the biggest sample size you can manage to poll is quite often just not big enough. Yet, even before the first vote is cast, and election campaigning reaches its crescendo, it may not be wrong to say that Mr Modi is probably entering the fray with an advantage.

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