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LATEST NEWS UPDATES | Farm woes and the upcoming polls -Tushar Arora & Abheek Barua </title>
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An analysis of how agri concerns will play out in four poll-bound States this year has some key takeaways for politicians
‘Rural distress’ became the major economic narrative to interpret the recent Assembly elections results for Gujarat, specifically..."/>
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An analysis of how agri concerns will play out in four poll-bound States this year has some key takeaways for politicians
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<h1 class="cat-box-title">Farm woes and the upcoming polls -Tushar Arora & Abheek Barua</h1>
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Published on</span><span class="text-date"> Mar 6, 2018</span>
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<div align="justify">-The Hindu Business Line<br /><br /><em>An analysis of how agri concerns will play out in four poll-bound States this year has some key takeaways for politicians<br /></em><br />‘Rural distress’ became the major economic narrative to interpret the recent Assembly elections results for Gujarat, specifically the fact that rural support for the incumbent government was considerably less than the support from cities.<br /><br />The woes of the rural sector could be a bigger issue this year. Of the eight States that go to the polls this year, the politically critical ones — Rajasthan, Karnataka, Madhya Pradesh and Chhattisgarh — have average percentage share of rural population (71 per cent) significantly higher than Gujarat’s figure of 57 per cent.<br /><br />Thus, a status check on the conditions in the villages of these states could thus be useful and while the exercise could appear a trifle simplistic, defining gauges of ‘rural distress’ factor would certainly help.<br /><br />An obvious caveat is necessary here. This is neither an attempt to predict poll results nor a comprehensive description of the problems of the rural economy.<br /><br /><em>The two inflations<br /></em><br />One gauge that has, perhaps, not got the attention it deserves is the difference between rural and urban inflation that changes in the terms of trade.<br /><br />Rural inflation in Gujarat was significantly higher that urban inflation for a sustained period in the run up to the elections although it dropped immediately before. For the period between early 2016 and August 2017, rural price rises exceeded the urban by a good 3 percentage point before elections.<br /><br />It is difficult to entirely overlook the correlation which can influence voting patterns. How do the poll-going States fare on this count? All the four States that we review (Rajasthan, Chhattisgarh, Madhya Pradesh and Karnataka) have seen persistently lower rural inflation than urban inflation in 2017. Thus, unless things change radically this year, this factor does not pose a challenge for an incumbent administration in these States.<br /><br />Measures of farmer profitability are another fairly obvious gauge. A number of analysts attributed the tilt in Gujarat’s voting patterns to ‘less than fair’ prices for two major crops — cotton and groundnut. In both cases, actual mandi prices were way below the minimum support price (MSP).<br /><br />Media reports suggest that before the elections, groundnut traded around 39 per cent below MSP in the wholesale markets of Gujarat.<br /><br />While the MSP for cotton in Gujarat was around ?900 for a 20-kg bale, farmers were getting ?700, roughly around 22 per cent lower than the MSP.<br /><br /><em>Price differences<br /></em><br />While this is itself debatable, we assume that the MSP is the fair price, and measure farmer profitability as the difference between this and market prices for the key crops in our focus States. The more the MSP exceeds market prices, the greater is the dent on farmer profitability. This throws up some interesting patterns. <br /><br />Please <a href="https://www.thehindubusinessline.com/opinion/farm-distress-and-elections-how-do-poll-going-states-fare/article22935762.ece?homepage=true" title="https://www.thehindubusinessline.com/opinion/farm-distress-and-elections-how-do-poll-going-states-fare/article22935762.ece?homepage=true">click here</a> to read more. <br /></div>
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<br><a href="https://www.thehindubusinessline.com/opinion/farm-distress-and-elections-how-do-poll-going-states-fare/article22935762.ece?homepage=true" class="re" target="_blank">The Hindu Business Line, 5 March, 2018, https://www.thehindubusinessline.com/opinion/farm-distress-and-elections-how-do-poll-going-states-fare/article22935762.ece?homepage=true</a><div class="clear"></div>
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LATEST NEWS UPDATES | Farm woes and the upcoming polls -Tushar Arora & Abheek Barua </title>
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<h1 class="cat-box-title">Farm woes and the upcoming polls -Tushar Arora & Abheek Barua</h1>
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Published on</span><span class="text-date"> Mar 6, 2018</span>
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<div align="justify">-The Hindu Business Line<br /><br /><em>An analysis of how agri concerns will play out in four poll-bound States this year has some key takeaways for politicians<br /></em><br />‘Rural distress’ became the major economic narrative to interpret the recent Assembly elections results for Gujarat, specifically the fact that rural support for the incumbent government was considerably less than the support from cities.<br /><br />The woes of the rural sector could be a bigger issue this year. Of the eight States that go to the polls this year, the politically critical ones — Rajasthan, Karnataka, Madhya Pradesh and Chhattisgarh — have average percentage share of rural population (71 per cent) significantly higher than Gujarat’s figure of 57 per cent.<br /><br />Thus, a status check on the conditions in the villages of these states could thus be useful and while the exercise could appear a trifle simplistic, defining gauges of ‘rural distress’ factor would certainly help.<br /><br />An obvious caveat is necessary here. This is neither an attempt to predict poll results nor a comprehensive description of the problems of the rural economy.<br /><br /><em>The two inflations<br /></em><br />One gauge that has, perhaps, not got the attention it deserves is the difference between rural and urban inflation that changes in the terms of trade.<br /><br />Rural inflation in Gujarat was significantly higher that urban inflation for a sustained period in the run up to the elections although it dropped immediately before. For the period between early 2016 and August 2017, rural price rises exceeded the urban by a good 3 percentage point before elections.<br /><br />It is difficult to entirely overlook the correlation which can influence voting patterns. How do the poll-going States fare on this count? All the four States that we review (Rajasthan, Chhattisgarh, Madhya Pradesh and Karnataka) have seen persistently lower rural inflation than urban inflation in 2017. Thus, unless things change radically this year, this factor does not pose a challenge for an incumbent administration in these States.<br /><br />Measures of farmer profitability are another fairly obvious gauge. A number of analysts attributed the tilt in Gujarat’s voting patterns to ‘less than fair’ prices for two major crops — cotton and groundnut. In both cases, actual mandi prices were way below the minimum support price (MSP).<br /><br />Media reports suggest that before the elections, groundnut traded around 39 per cent below MSP in the wholesale markets of Gujarat.<br /><br />While the MSP for cotton in Gujarat was around ?900 for a 20-kg bale, farmers were getting ?700, roughly around 22 per cent lower than the MSP.<br /><br /><em>Price differences<br /></em><br />While this is itself debatable, we assume that the MSP is the fair price, and measure farmer profitability as the difference between this and market prices for the key crops in our focus States. The more the MSP exceeds market prices, the greater is the dent on farmer profitability. This throws up some interesting patterns. <br /><br />Please <a href="https://www.thehindubusinessline.com/opinion/farm-distress-and-elections-how-do-poll-going-states-fare/article22935762.ece?homepage=true" title="https://www.thehindubusinessline.com/opinion/farm-distress-and-elections-how-do-poll-going-states-fare/article22935762.ece?homepage=true">click here</a> to read more. <br /></div>
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LATEST NEWS UPDATES | Farm woes and the upcoming polls -Tushar Arora & Abheek Barua </title>
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<h1 class="cat-box-title">Farm woes and the upcoming polls -Tushar Arora & Abheek Barua</h1>
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Published on</span><span class="text-date"> Mar 6, 2018</span>
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<div align="justify">-The Hindu Business Line<br /><br /><em>An analysis of how agri concerns will play out in four poll-bound States this year has some key takeaways for politicians<br /></em><br />‘Rural distress’ became the major economic narrative to interpret the recent Assembly elections results for Gujarat, specifically the fact that rural support for the incumbent government was considerably less than the support from cities.<br /><br />The woes of the rural sector could be a bigger issue this year. Of the eight States that go to the polls this year, the politically critical ones — Rajasthan, Karnataka, Madhya Pradesh and Chhattisgarh — have average percentage share of rural population (71 per cent) significantly higher than Gujarat’s figure of 57 per cent.<br /><br />Thus, a status check on the conditions in the villages of these states could thus be useful and while the exercise could appear a trifle simplistic, defining gauges of ‘rural distress’ factor would certainly help.<br /><br />An obvious caveat is necessary here. This is neither an attempt to predict poll results nor a comprehensive description of the problems of the rural economy.<br /><br /><em>The two inflations<br /></em><br />One gauge that has, perhaps, not got the attention it deserves is the difference between rural and urban inflation that changes in the terms of trade.<br /><br />Rural inflation in Gujarat was significantly higher that urban inflation for a sustained period in the run up to the elections although it dropped immediately before. For the period between early 2016 and August 2017, rural price rises exceeded the urban by a good 3 percentage point before elections.<br /><br />It is difficult to entirely overlook the correlation which can influence voting patterns. How do the poll-going States fare on this count? All the four States that we review (Rajasthan, Chhattisgarh, Madhya Pradesh and Karnataka) have seen persistently lower rural inflation than urban inflation in 2017. Thus, unless things change radically this year, this factor does not pose a challenge for an incumbent administration in these States.<br /><br />Measures of farmer profitability are another fairly obvious gauge. A number of analysts attributed the tilt in Gujarat’s voting patterns to ‘less than fair’ prices for two major crops — cotton and groundnut. In both cases, actual mandi prices were way below the minimum support price (MSP).<br /><br />Media reports suggest that before the elections, groundnut traded around 39 per cent below MSP in the wholesale markets of Gujarat.<br /><br />While the MSP for cotton in Gujarat was around ?900 for a 20-kg bale, farmers were getting ?700, roughly around 22 per cent lower than the MSP.<br /><br /><em>Price differences<br /></em><br />While this is itself debatable, we assume that the MSP is the fair price, and measure farmer profitability as the difference between this and market prices for the key crops in our focus States. The more the MSP exceeds market prices, the greater is the dent on farmer profitability. This throws up some interesting patterns. <br /><br />Please <a href="https://www.thehindubusinessline.com/opinion/farm-distress-and-elections-how-do-poll-going-states-fare/article22935762.ece?homepage=true" title="https://www.thehindubusinessline.com/opinion/farm-distress-and-elections-how-do-poll-going-states-fare/article22935762.ece?homepage=true">click here</a> to read more. <br /></div>
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<br><a href="https://www.thehindubusinessline.com/opinion/farm-distress-and-elections-how-do-poll-going-states-fare/article22935762.ece?homepage=true" class="re" target="_blank">The Hindu Business Line, 5 March, 2018, https://www.thehindubusinessline.com/opinion/farm-distress-and-elections-how-do-poll-going-states-fare/article22935762.ece?homepage=true</a><div class="clear"></div>
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LATEST NEWS UPDATES | Farm woes and the upcoming polls -Tushar Arora & Abheek Barua
Farm woes and the upcoming polls -Tushar Arora & Abheek Barua
Published on Mar 6, 2018
Modified on Mar 6, 2018
-The Hindu Business Line
An analysis of how agri concerns will play out in four poll-bound States this year has some key takeaways for politicians
‘Rural distress’ became the major economic narrative to interpret the recent Assembly elections results for Gujarat, specifically the fact that rural support for the incumbent government was considerably less than the support from cities.
The woes of the rural sector could be a bigger issue this year. Of the eight States that go to the polls this year, the politically critical ones — Rajasthan, Karnataka, Madhya Pradesh and Chhattisgarh — have average percentage share of rural population (71 per cent) significantly higher than Gujarat’s figure of 57 per cent.
Thus, a status check on the conditions in the villages of these states could thus be useful and while the exercise could appear a trifle simplistic, defining gauges of ‘rural distress’ factor would certainly help.
An obvious caveat is necessary here. This is neither an attempt to predict poll results nor a comprehensive description of the problems of the rural economy.
The two inflations
One gauge that has, perhaps, not got the attention it deserves is the difference between rural and urban inflation that changes in the terms of trade.
Rural inflation in Gujarat was significantly higher that urban inflation for a sustained period in the run up to the elections although it dropped immediately before. For the period between early 2016 and August 2017, rural price rises exceeded the urban by a good 3 percentage point before elections.
It is difficult to entirely overlook the correlation which can influence voting patterns. How do the poll-going States fare on this count? All the four States that we review (Rajasthan, Chhattisgarh, Madhya Pradesh and Karnataka) have seen persistently lower rural inflation than urban inflation in 2017. Thus, unless things change radically this year, this factor does not pose a challenge for an incumbent administration in these States.
Measures of farmer profitability are another fairly obvious gauge. A number of analysts attributed the tilt in Gujarat’s voting patterns to ‘less than fair’ prices for two major crops — cotton and groundnut. In both cases, actual mandi prices were way below the minimum support price (MSP).
Media reports suggest that before the elections, groundnut traded around 39 per cent below MSP in the wholesale markets of Gujarat.
While the MSP for cotton in Gujarat was around ?900 for a 20-kg bale, farmers were getting ?700, roughly around 22 per cent lower than the MSP.
Price differences
While this is itself debatable, we assume that the MSP is the fair price, and measure farmer profitability as the difference between this and market prices for the key crops in our focus States. The more the MSP exceeds market prices, the greater is the dent on farmer profitability. This throws up some interesting patterns.
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