Thursday, February 10, 2011

A Profitable Proposition

Yetiketham batti yei putlu pandinchi yennadu metukerugadanna- cherabanda raju
(He grapples to pull the bucketful of water from lake and harvested bountiful crop with immense strive but he never had even one grain)
I used to memorize the above poetry when I think about the farmers’ income. National sample survey speaks about the farmers monthly income was an average of Rs.2115 in 2003 but positively it could be Rs.2700.00 in 2011. We have been in the regimes of lot of parties from past 60 years, too many budgets and many 5 years plans, no improvement in farmers’ income level except green revolution which was aimed for national self sufficient in food grains. Every government has been chanting that they want to make farmers as kings and the UPA government aimed the growth of 4% in agriculture and proclaiming that the policies and budgets are in the same direction. In fact, are these policies really going to help the 600 millions of Indian farmers from their agrarian crisis? However, the key point is how to maximize the farmers’ income and make the agriculture as a profitable proposition.

The increased cost of cultivation dragged the farmers into distress and the farmers are not getting remunerative price for their produces. The Swami nathan committee recommended the Minimum Support Price should be the cost of production plus 50% profit, but presently the cost of production perpetually increasing in terms of inputs, farm labor wages and land rent. If the farmer receives 60%-70% of the share which the price paid by the consumer, it really helps the farmers get out of their burdens. The government needs to try on some selected produces for remunerative prices which are a percentage on the prevailing market prices paid by the consumer.

The agriculture Insurance Scheme is still in experimental phase since 1985 and that has been connected with crop loans by banks since the banks want to be safe against their loans (Insurance companies are protecting bankers interest not farmers). The small and tenant farmers have limited access to the banks and most of the farmers don’t have awareness on crop insurance schemes. The Insurance company agents and agriculture extension officers have to make the farmers known about the insurance policies and have to form the units with group of farmers. The crop insurance schemes are covering the pre harvest crop only and we have been talking about the 40% loss of post harvest, does it make sense to insure the post harvest? Of course the modalities have to be defined….

According to National Crime Records Bureau (NCRB), the farmers’ suicides were reported 16196 and 17000 in 2008 and 2009 respectively despite the government waived off the crop loans. It clearly explains that most of the farmers were not beneficiaries of the loan right off scheme since they borrowed the money from private money lenders because they don’t have access to bank credit facility. The government or Reserve bank has to formulate the strict guidelines to the commercial banks on extending credit facilities to the small and marginal farmers with low interest rates. In fact some commercial banks are extending the low interest loans to agribusiness people in the veil of agriculture sector and these things should be curbed. Government and local bodies have to make the special provisions to the tenant farmers to avail the loans from the banks. Asper National Commission on Farmers recommendations, 4% of the interest rate on crop loans would be suggestible and helpful to small and marginal farmers.

According to National Sample Survey Organization, more than 45percent of farmers would like quit farming. There is a need of direct income support to farmers as fixed monthly income, at least to some small farmers based on their land holding. The subsidies whatever the government has been giving to farmers are very low which compared to the incentives for corporate houses. In the last budget the Government written off Rs.500, 000 crores of tax amounts for corporates and the government named the budget as Pro- Farmer budget.  Government is spending lot of amount on fertilizers subsidies which the total amount goes to the industry not to the farmers. Giving direct subsidy to the farmers is best alternative since the farmers will get the real benefit, fair distribution of subsidies and it stops the illegal trading.

Agriculture is a life science, modern technologies are indispensable for better farming. Using mechanical engeenering, Information technology and Bio technology are required for agronomic and social growth. Biological solutions are necessary to replace the chemical applications in agriculture and safeguard the soil ecology. Organic farming is going to be vital in future agriculture and government has to promote the Organic farming among the small farmers. Public Private Partnership is required to promote agro-processing, agro-industries which can prevent the post harvest losses, Value addition to produces and farmers will get remunerative prices.

India has lot of young people who are looking for employment and if everybody prefers IT or White collar jobs then who are going to feed us. We need large number of people to choose the modern agriculture as their profession, the government has to promote the youth in farming and agriculture allied services to ensure that can provide a decent income. Farmers and farm laborers are working very hard to produce food for us and enriching our economy, it’s our responsibility to make sure their lives should be cherished with good quality. I have a dream that one day the agriculture will recapture its fortune as mainstream of the economy and I hope it would be a profitable proposition.