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State of Economy: Farm distress among major challanges for new government

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New Delhi, May 18, 2019-

Once the high-voltage Lok Sabha polls come to an end, the new government will have a major challenge of getting rural economy back on the track, especially, in the wake of forecast of delayed, below normal monsoon this year with chances of drought parts of the country.

Despite higher farm output in the country in the previous years, the remuneration to farmers has lowered due to the widening gap between demand and supply ratio.

Poor procurement of commodities owing to inadequate number and delay in the opening of purchasing centres by the government agencies forced the farmers to make distressed sale in past few years.

In case of vegetables, while the retail prices hovered between Rs 20-30 in major cities, the prices received by farmers for semi-perishable commodities such as potato and onion were found to have slumped to Rs 1 per kg.

The fall in crop prices led the agitated farmers across the farmers to vent their anger on streets, and five mega rallies by them were held in the national capital alone in 2018.

It had provided the opposition parties of different hues a common ground to rally against the BJP-led government ahead of the ongoing general elections.

Farm analyst Devinder Sharma said the farm sector has been in “terrible distress” for the past few years and immediate steps were needed to arrest the situation from deteriorating further.

“First, Farm Commission should be formed by subsuming Commission for Agricultural Costs and Prices (CACP) to ensure remunerative prices to farmers. In addition, direct income support to farmers should be increased from current Rs 6,000 per year to at least Rs 18,000 per month in order to bring them out of the vicious cycle of indebtedness,” he said.

Sharma also said the government should allow public investment in the farm sector and come up with ‘ease of doing farming’ on lines of ease of doing business.

“Over 50 per cent of the population in the county is dependent on agriculture while what we spent on it is just 2-3 per cent of the GDP (Gross Domestic Product). Setting up the ease of doing farming would help clear bottlenecks and hurdles in the sector, thus addressing about 80 per cent of the farm distress,” he said.

Experts and analysts had last year said that the BJP, which came to power at Centre in 2014 mainly on the poll plank of doubling farm income, would see farm distress haunting them in the 2019 elections.

However, the Balakot airstrike changed the narrative.

“There were two major issues– unemployment and farm distress. However, they were successfully ambushed after the Balakot episode,” said Yogendra Yadav of Swaraj India, who is credited for bringing over 200 farm outfits under one banner– All India Kisan Sangharsh Coordination Committee (AIKSCC).

“These issues were definitely sidelined and did not become as important as people thought.”

One-third of the country witnessed drought-like situation last year and not-so-good prediction of monsoon this year means farm distress could aggravate, Yadav said.

“The new government will have to take immediate measures to tackle drought if monsoon turns out to be below average,” he said.

He also sought the new dispensation to refrain from efforts keep crop prices low so as to control food prices in urban areas under control.

“Farmers should not be punished for it,” he said. Economists need to change their outlook as higher production does not mean higher income, Sharma said.

“Economists cannot see beyond what is prescribed in the textbook. Punjab has the highest productivity ratio in the world. However, it has become a hotbed of farm suicides,” he said.

He said growth in real farm income from 2011-2016 was below 0.5 per cent and it was at stagnant for the past two years.

It also implies the government’s ambitious scheme of doubling farmers’ income by 2022 cannot be achieved merely through boosting production.

Making credit available to farmers besides expanding agriculture market network and building logistics and transport linkages could be some of the short-term and long-term solution to improve the farm sector, the experts said.  (Agency)

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