IASbhai Daily Editorial Hunt | 11th Sep 2020
If you set goals and go after them with all the determination you can muster, your gifts will take you places that will amaze you.– Les Brown
EDITORIAL HUNT #131 :“Restoration of Indian Agriculture | UPSC“
Restoration of Indian Agriculture | UPSC
R. Ramakumar is NABARD Chair Professor, Tata Institute of Social Sciences, Mumbai
An agriculture-led revival as flawed claim
The crisis in agriculture demands that the government announce a strong fiscal stimulus for the rural economy
SYLLABUS COVERED: GS 3: Agriculture
“Agriculture will lead India’s economic revival” after the pandemic loosens the grip.Substantiate -(GS 3)
- Inflation and Farmers
- Way forward
- PRODUCTION : India’s food grain production in 2019-20 was 3.7% higher than in 2018-19.
- PROCUREMENT : The procurement of rabi wheat in 2020-21 was 12.6% higher than in 2019-20.
- INFLATION : Food inflation in the Q1 of 2020-21, at 9.2%, was higher than in the previous year due to “sustained demand for food”.
- PACKAGES : The state’s economic package for agriculture will further position agriculture as the engine of revival.
Let us now consider each of the above claims.
- PROCUREMENT : During the lockdown, State governments in many northern States put in considerable efforts to ensure that procurement did not suffer.
- SELLING AT MSP : As per official data, only 13.5% of paddy farmers and 16.2% of wheat farmers in India sell their harvest to a procurement agency at an assured Minimum Support Price (MSP).
- MARKET ARRIVALS : The market arrivals of all the 15 crops were lower in 2020 than in 2019. Paddy, lentil, tomato and banana constituted more than 75%.
- CEREALS IN MARKET : In wheat, the most important rabi crop, only 61.6% of the arrivals in 2019 was recorded in 2020.
The most important problem faced by farmers were :
- Loss of markets
- Stemming from the disruption in supply chains
- Closure of mandis
- Fall in consumer food demand
- Loss of incomes, and higher procurement was hardly alleviating.
- In addition, there were major losses in the milk, meat and poultry sectors.
INFLATION AND PRICES
- CONSUMER PRICE INDICES : Inflation rates estimated using consumer price indices are not representative of farmer’s prices.
- CAUSE OF INFLATION : Inflation was largely due to disruptions in supply chains and rise in trader margins.
- FARMERS POCKET : So, it was not just that farmer’s prices fell; most were also forced to pay more for food purchases.
HIGHER KHARIF SOWING
There is no surprise in the growth of kharif sowings in 2020.
- INCOME SECURITY : Many rural households may have returned to farming or intensified farming for food- and income-security.
- MIGRANTS VS FARMERS : Rural unemployment rates rose sharply in 2020, to 22.8% (April), 21.1% (May) and 9.5% (June). Even in August 2020, rural unemployment rates were higher than in February 2020 or August 2019.
TRICKLE FROM PACKAGE
- CONTRIBUTION OF AGRICULTURE : Agriculture contributes only about 15% to India’s Gross Value Added (GVA).
- PERCENTAGE CATCH : Thus, even if agriculture grows by 4%, it is likely to contribute only 0.6 percentage points to GVA growth.
- TRICKY PACKAGE : Instead of frontloading the instalments of PM-KISAN, the State should have doubled the payments to farmers from ₹6,000 a year to ₹12,000 a year.
- INCREASING MSP : Instead of raising the minimum support price (MSP) for kharif paddy by ₹53 per quintal the state should have set all MSPs at 150% of the C2 cost (comprehensive cost) of production.
- LOAN WAIVERS : Instead of a moratorium on loan repayments, the state should have waived the interest on loans taken by farmers in 2019 and 2020.
SOURCES: THE HINDU EDITORIAL HUNT | Restoration of Indian Agriculture | UPSC