Why our farmers urgently need help

There is trouble on the farm front. With untimely rains accompanied by hailstorms and strong winds showing no signs of relenting, further deepening the prevailing agrarian crisis; and with the spate of farmer suicides on the rise, agriculture faces its worst-ever crisis. While the rising number of farmer suicides is only a reflection of how fragile the agrarian economy is, the entire focus is on providing adequate relief and compensation to farmers who suffered crop losses.  

In this bargain, the real issues confronting farming are once again being sidelined. Once the rains are over, the relief distributed, and the nation’s attention shifts to how much the loss in crop production is 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.  

The intention is very clear. With the Centre conveying to the Supreme Court its inability in providing farmers with 50 per cent profit over the cost of cultivation, farmers are being left in the lurch. They are expected to fend for themselves, and face the vagaries of the markets once the government begins to withdraw the minimum support price (MSP) for wheat and paddy. Economic Survey 2015 has made this amply clear.  

Farmers have reasons to feel betrayed. After a high-pitch election campaign a year earlier when the BJP’s prime ministerial candidate Narendra Modi time and again promised to enhance the Minimum Support Price (MSP) by 50 per cent if his party came into power, the government has simply backtracked on its promise. But soon after coming into power, the government raised the MSP for paddy and wheat by a paltry Rs50 per quintal, which translates into an increase of 3.6 per cent, not enough to offset the additional burden of inflation at that time. 
 
The farmers’ anger is quite justified. Despite being at the bottom of the pyramid, Indian farmers have not failed the nation. While they continue to produce a bumper harvest year after year, they are made to pay the price for keeping food prices low for consumers. As per the latest estimates of the National Sample Survey Organisation (NSSO) a farmer family on an average earns only Rs3,078 from farming operations. According to another survey, nearly 58 per cent of the farmers go to bed hungry. Another survey by Centre for the Study of Developing Societies (CSDS) shows that 62 per cent farmers want to quit agriculture.

On top of it, basmati rice and cotton witnessed a crash in prices. While basmati rice production had doubled in Punjab and Haryana, an alarming dip in prices was observed. Disappointed farmers sold basmati at prices ranging between Rs1,600-2,400 per quintal, against a price of Rs3,261 to Rs6,085 they got last year. In cotton too, prices slumped from an average of Rs4,400 to Rs5,200 per quintal last year to around Rs3,000 this year, prompting the government to direct the Cotton Corporation of India to step in to buy at the procurement price of Rs3,750 per quintal. 

In Maharashtra alone, the downtrend in cotton and soybean prices had resulted in a loss of Rs12,000-crores for farmers. 

In case of sugarcane the situation is no better. In fact, reports of cane farmers committing suicide due to delayed payments have poured in recently from Uttar Pradesh, Maharashtra and Karnataka. Despite the sugar sector decontrol coming into effect, the fact remains that the mills have still to clear cane price arrears of Rs12,300 crore. 

Appearing before a Supreme Court bench of Justices SJ Mukhopadhaya and NV Ramana, the additional solicitor general Maninder Singh, however, said: “Prescribing an increase of at least 50 per cent on cost may distort the market. A mechanical linkage between MSP and cost of production may be counter-productive in some cases.” He told the court that the pricing policy seeks to achieve the objective of fair and remunerative prices and is not an income policy. While the Court is still to deliver its verdict, in simple words, the government has expressed its inability to hike the MSP. 

At a time when the industry has managed to even wrest out of cost accounting procedures in many important sectors like coal, natural gas and automobiles, and therefore can arbitrarily fix any price for their products, I find it amusing to know that providing a higher price to farmers will distort the markets. Considering that only 6 per cent India’s 60-crore farmers get the benefit of MSP, and the remaining 94 per cent are in any case dependent on the vagaries of markets, it shows the markets are only exploiting the farmers. If the markets had provided farmers with an economic price, I am sure 94 per cent of the farming community would have been a happy lot by now. 

The question of an ‘income policy’ for farmers therefore assumes importance in the wake of the serial death dance that continues to be enacted on the farms. Over 3 lakh farmers have committed suicide in the past 17 years.  Moreover, with the World Trade Organisation (WTO) breathing down the neck, and demanding freezing of MSP for farmers, it looks difficult whether the government will have the political courage to defy WTO. Given these circumstances, the best option is to start looking for a guaranteed monthly income for farmers, which benefits the entire farming community unlike the pricing policy through a system of providing MSP for wheat and rice farmers.

The real big bang in economic reforms would therefore be when the government constitutes a National Farmers Income Commission that works out a minimum assured monthly income that a farming family must get. Incorporating crop harvest and also basing the calculations on the geographical location of the farm, the Commission should be directed to provide a real time estimate of the farm income for various categories of farmers. If a chaprasi in the government can get a minimum basic salary of Rs15,000 per month, I see no reason why the farmers should be deprived of his legitimate due. 

The author is a food policy expert