Jun 15, 2009

Do exports benefit farmers? Let us look at cotton

There is general feeling that agricultural commodity exports translate into higher income for farmers. It may be true in some cases, but by and large I have always seen that the benefit actually accrues only to the exporters. They are often able to export more because of the price difference, taking advantage of the low domestic prices vis a vis the international prices.

Take the case of cotton. I think it is an excellent case study to know who earns from exports. I remember the Commission for Agricultural Costs and Prices (CACP) had several years back in one of its reports said that cotton growers were deliberately paid 20 per cent less so as to keep the textile industry globally competitive. This policy has continued thereafter. In other words, it is the cotton farmers who have actually been subsidising the textile industry all these years.

No wonder, nearly 70 per cent of the farmers who have committed suicide were cotton growers.

All these years, cotton farmers were paid low prices. Then suddenly, in 2008-09, the cotton year that just passed, the procurement price of cotton were raised substantially -- from Rs 2050 to Rs 3000 -- a quantum jump something not witnessed in the recent past. This 40 per cent increase in procurement price certainly did not find favour with the textile industry, and of course the exporters. There were demands for lowering the price, and also for more incentives to exporters who were finding it uneconomical to export cotton in view of the high domestic prices.

Lesson 1: Exporters need cotton at low pricesSo obviously it is not the cotton growers who benefit if exports increase.

While farmers gained, and this is also reflected in the way the electorate has voted in the suicide-prone cotton belt of Vidharba, the industry wasn't happy. But now let us look at the production figures. In 2007-08, the area planted under cotton was 94.39 lakh hectares. In 2008-09, it remained almost same at 93.73 lakh hectares. You would generally not expect much variation in production given that the area had remained almost static. And also let us not forget, considering the claim that production was actually increasing because of Bt cotton, if it holds true, there is no reason why cotton production in 2008-09 shouldn't have kept pace with the recorded harvest a year earlier in 2007-08.

As per the Cotton Corporation of India (CCI), cotton production in 2007-08 was a record 315 lakh bales (each bale weighing 170 kgs). This was attributed to a massive coverage of the cotton area with Bt cotton varieties, which is believed to have translated into higher productivity. The CCI also acknowledges that the agro-climatic conditions in 2007-08 had remained favourable.

In 2008-09, production drastically fell to 290 lakh bales. This was of course blamed on adverse weather conditions during the crop season. Well, did you notice that when the production is high, the credit goes to Bt cotton varieties; and when production falls, it is invariably the inclement weather to be blamed. The fact remains that if the weather is fine, it doesn't matter whether you are cultivating Bt cotton or non-GM cotton. Production will remain high in both the cases.

In that case, why not give credit to the weather for higher production?

If higher production in 2007-08 is attributed to increased productivity from Bt cotton; shouldn't the fall in production in 2008-09 also be linked to the declining performance of Bt cotton? Why I am specifically tallking about Bt cotton is because despite the claims by the seed industry and the government, the fact is that Bt cotton does not increase productivity. It only reduces crop losses.

Lesson 2: It is the weather which is actually responsible for higher production, and similarly it is the weather which can reduce crop productivity and thereby lower total production.

Coming to exports. This is where you see an interesting trend. In 2007-08, India exported 85 lakh bales. This year, the expectations have nose dived. Although the expectation is that India should be able to export 50 lakh bales this year, Cotton Association of India (CAI) estimates that by August 2009, the actual exports may touch only 40 lakh bales.The textile industry blames the high domestic cotton prices for the decline in exports, and estimates that the final figure may not even touch 30 lakh bales. The office of Textile Commissioner has figures upto July 2009, and it shows that so far permission for only 28 lakh bales exists including 16 lakh bales to be exported to Bangladesh, Pakistan, China and Indonesia.

Whatever be the final figures, exports have come down heavily from 85 lakh bales in 2007-08 to 50 lakh bales (if we accept the estimates drawn for the year) in 2008-09. While the industry may crib and cry, the fact remains that farmers are a happy lot. They never had it so good. And this was primarily because of a higher procurement price and not because of the high exports undertaken in the past.

Lesson 3: Exports do not benefit farmers. If cotton exports had benefitted farmers, there is no reason for the suicides to be so high. And secondly, farmers would have demanded an export-oriented marketing system rather than high procurement prices. 


Anonymous said...

आदरणीय देवेन्‍द्र जी सादर प्रणाम, एक ऐसे समय में जब देश-दुनिया उपभोक्‍तावाद व बाजारवाद का जश्‍न मना रही हो, उस समय खेती किसानी की सुध लेने के कारण आप आदर के पात्र हैं । 15 जून के ब्‍लाग में आपने निर्यात क्षेत्र से किसानों के लाभ होने के भ्रमजाल को तार्किक ढंग से खंडित किया । इसके लिए हार्दिक धन्यवाद स्‍वीकार करें । कृषि उपजों के निर्यात से किसानों को लाभ होगा यह बाजार के खिलाड़ियों के द्वारा फैलाया गया भ्रम है क्‍योंकि इससे उन्‍हें मोटी कमाई होती है ।
दरअसल किसानों को न तो कर्जमाफी की जरूरत है ओर न ही सरकारी कर्मचारियों की भांति नियमित वेतन की, जिसका आप समय-समय पर समर्थन करते हैं, किसानों को एक ऐसी व्‍यवस्‍था चाहिए जिसमें उपभोक्‍ता द्वारा चुकाए जाने वाले मूल्‍य का अधिकांश हिस्‍सा उसकी जेब में आए न कि बाजार की शक्‍तियों के । इसे आलू के उदाहरण से समझा जा सकता है । इस साल जनवरी में जिस आलू को 2 रूपये किलो कोई खरीदने वाला नहीं मिल रहा था वहीं आलू आज 15-16 रूपये किलो बिक रहा है । जुलाई-अगस्‍त तक 20 से 25 रूपये किलो तक भी आलू बिक जाए तो कोई आश्‍चर्य नहीं होगा । अकेले जून के पहले पखवाड़े में आलू की कीमतें 60-70 प्रतिशत तक बढ़ी हैं । आखिर जून में ऐसा क्‍या हो गया ? न तो सरकार ने आलू उत्‍पादन के संबंध में कोई नया अनुमान जारी किया, न ही देश की जनसंख्‍या व मांग में अचानक वृद्धि हुई और न ही कोल्‍ड स्‍टोरेज में रखे आलू के बड़े पैमाने पर सड़ने की खबर आई । फिर क्‍यों आलू की कीमतों में आग लगी हैं ? आपका यह कहना ठीक है कि दूध से भी महंगा पानी खरीद कर पीने वाला मध्‍यवर्ग कृषि वस्‍तुओं की कीमतों में एक-दो रूपये की बढ़ोत्‍तरी होने पर हल्‍ला मचाने लगता है , लेकिन क्‍या कृषि उपज की कीमतों में बढ़ोत्‍तरी का लाभ किसानों तक पहुंच पाता है । हरगिज नहीं । तभी तो आज बहुसंख्‍यक आलू उत्‍पादक किसान हाथ मलते नजर आ रहे हैं और उपभोक्‍ताओं द्वारा चुकाई गई कीमत से नकली किसान, व्‍यापारी व बिचौलिए, मालामाल हो रहे हैं ।

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Surender Dalal . said...