Apr 14, 2015

Killing farming by simply keeping the farm incomes low.



Prime Minister Narendra Modi has announced a higher relief package for farmers. At the same time he has directed banks to restructure agricultural loans and also asked insurance companies to proactively settle the claims. “Helping farmers at this time of distress is the govt’s responsibility,” the prime minister assured the nation, stating that a team of central ministers were sent to the affected areas to assess the crop damage.

This is certainly a welcome step. But once the rains are over, the relief is distributed, and the nation’s attention shifts to how much is the loss in crop production and the resulting impact on food inflation, farmers will once again be forgotten.  This has been the travesty of farming all these years, and it is primarily for the deliberate neglect and apathy that agriculture continues to bleed.  In the past 20 years, close to 3 lakh farmers have committed suicide, 2 farmers every hour, and I am not sure how many more sacrifices are required before the nation sits back and takes notice.

Let’s be clear. The spate of farmer suicides in the wake of continuing spell of unseasonal rains is simply a reflection or a symptom of how fragile the farm economy is. Even a small aberration in weather – unseasonal rains, high winds, dry weather and drought – multiplies the risk factor for the farmers to a level that it becomes unmanageable.  Many farmers, who died in the past one month, died of heart attack, unable to bear the shock of seeing their healthy crop lying flat. Livelihood security therefore for any farming family hangs by a slender thread.

How fragile is the farm economy has been talked about very often, but little understood. It is generally believed that a reasonably good relief package at times of a calamity is enough to bring back the farmers economy. What is not know is that any natural calamities like heavy rains, floods and drought push back the farmer’s subsistence economy at least by three years.

To understand it a little more clearly I looked at the latest kharif and rabi reports of the Commission for Agricultural Costs and Prices (CACP). Since farmers have been demanding a higher minimum support price (MSP) for wheat and paddy, and knowing that the Centre has already conveyed to the Supreme Court its inability to raise farm prices by 50 per cent as ‘it will distort market prices’ a careful perusal of the cost and income estimates by the CACP tells us why farmers are killing themselves. Unless the government makes a determined effort to provide farmers with a guaranteed monthly income package I don’t see any hope of reviving the sinking farm economy.

Let us look at the costs and the return from the cultivation of some of the major crops of the region. The CACP is government’s own organization which works out the MSP for farmers. Its calculations therefore are more accurate than any other study or survey. In its latest reports, CACP has calculated the average cost and returns for the period 2010-11 and 2012-13. Now hold your breath. Accordingly, the net return for wheat on all India basis stands at Rs 14,260 per hectare. For Mustard, the return is Rs 14,960; and for gram Rs 7,479.

Since most suicides happened in Uttar Pradesh, I looked at the cost and price calculations for wheat-rice cropping pattern that most farmers would follow. For wheat, the average net return or income that a farmer gets from one hectare is Rs 10,758. Since wheat is a 6-month crop, the average income a wheat farmer can expect from cultivating one hectare comes to a paltry Rs 1793. With such a low return from wheat cultivation, there would always be a possibility for a UP farmer to take to suicides. Let’s now look at his annual income. If he is cultivating rice, the net returns have been computed at Rs 4311 only. Add the returns for both wheat and paddy it comes to Rs 15,669 or Rs 1306 per month.

Now, you will say that the average in Punjab would be much higher than the national average. The CACP works out the average net return in Punjab for wheat at Rs 18,701 per hectare. For Bihar, where there are no regulated APMC markets, average farmer’s return is Rs 9,986, about half of what Punjab farmers get.

In the case of kharif crops, the CACP estimates are for the period 2009-10 to 2011-12. The net return for paddy for the country has been computed at a low of Rs 4,500 per hectare. For cotton, another major crop, the net returns are to the tune of Rs 15, 689; and for ragi millet it is actually negative. Looking at the State-wise average costs, the net returns for paddy for Punjab is Rs 17, 651. For Haryana, it is Rs 17,960 per hectare, and for Andhra Pradesh Rs 6,483. Paddy farmers in Bihar and Assam get a negative return, which means they cultivate losses. The loss per hectare in Assam is Rs 3361 and in Bihar Rs 266.   

Since the general cropping pattern that Punjab and Haryana farmers follow in a year is also wheat followed by paddy, let us look at the combined returns for cultivating these two crops. Wheat provides the Punjab farmers with an average return of Rs 18,701 per hectare. Add to it the net return from paddy, Rs 17,651, the total a farmer earns from cultivating wheat and paddy in a year comes to Rs 36,352 from a hectare. For a month, the average a farming family in Punjab earns from one hectare is Rs 3,029. Yes, you got it right. It is Rs 3,029 per month.

If this is the average for Punjab, Haryana and Uttar Pradesh, which is considered to be the country’s food bowl, I shudder to think of the plight of farmers elsewhere in the country. This is primarily the reason why farmers are committing suicide, and also why a majority wants to quit agriculture if given a choice. The desperate need therefore is to set up a National Farmers Income Commission with the mandate to work out an assured monthly package for farmers depending on his crop productivity and also the geographical location of the farm. If a chaprasi can get a minimum monthly salary of Rs 15,000: and a safai karamchari in UP is paid Rs 18,500 as basic salary, why should the annadata not be get an assured monthly package. Why should the farmers alone bear the cost of keeping food prices low for the middle class? #

Suicidal apathy. Orissa Post. April 16, 2015
http://www.orissapost.com/epaper/160415/p8.htm 

Why relief packages and loan waivers won't enough to stem farm suicides. IndiaTogether. April 13, 2015
http://indiatogether.org/farming-crisis-and-farm-suicides-due-to-low-agricultural-returns-agriculture

जाना पहचाना संकट. Dainik Jagran, April 11, 2015
http://www.jagran.com/editorial/apnibaat-familiar-crisis-12252870.html

1 comment:

Vikas said...

Dear Sharma,
First of all I am appalled by zero comment on such a important issue !!! Either cpuntrymen, who otherwise comment on everything, are ignorant or they do not consider it worthy...I hope later one is wrong....
Anyway I had been involved in farming as a kid in a farming family and can share the pain of farmer when a black sky does not provide rain or pours water when not required. Now with time passing farming is becoming less profitable...even Kharif crops becoming loss making...my parents still practice farming inspire of my repeated explanation to them that it is not beneficial....they tell " yeh humara karm hai...him nahin karenge to log kya khayenge and dharti Mata gaali degi"...unluckily I stop at this point...alhough this thought process is fading away with the speed of light by seeing ralative easiness, risk and income in other fields....the reality is before 5 days we have sold our wheat at Rs 1380 per quintal in comparison to Rs 400 in year 1990...what a meagre 3.5 times increase, and that is more or leas true for all the crops....the input cost of labour increased from Rs 25 per day to staggering, although still lower, to Rs 400....tractor charges much more....so in short the increase of 15-16 times....there was a time when farmers were equated with soldiers, and luckily their salary has increased by atleast 20 times in same period along with other benefits like pension, canteen, medical and so on , and rightly so, no matter today they are ready to pay Rs 5.0 lakhs as a bribe to become soldier by selling their land. With progress of time the agriculture business is becoming more challenging and less paying....if, same things continues, after this generation passes, we will see huge food security issues...no matter by seeing plight of my parents I onve aspiring to be a farmer have become an engineer, luckily from IIT...my current profession is at least million times more reawarding than agriculture....now the real problem is mindset of those who are responsible for change and to a some extent society, which has no issue in paying more for a packaged bottle of water from industrialist than to a farmer for a kg wheat and a little cow milk....they do not have facts about agricultural subsidy in western world and support abolishing everything small good which is still left at ground....I hkope God really helps...and people like u succeed !!!