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LATEST NEWS UPDATES | Farming goes to seed -Jayshree Sengupta

Farming goes to seed -Jayshree Sengupta

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published Published on Feb 15, 2017   modified Modified on Feb 15, 2017
-The Tribune

Demonetisation didn’t overly impact the sector, but devitalisation is a concern

THERE has been a lot of speculation about the extent of damage due to demonetisation on agriculture. Small farmers suffered most because cash in hand means a lot to them. They were unable to pay for inputs like fertilisers, seeds and farm labour and experienced low demand for their perishable produce. The latest data from government’s agricultural ministry however shows that demonetisation did not have an adverse impact on agricultural production. This year’s rabi crop seems to have got the highest acreage in five years. Based on the occurrence of good monsoon, the ministry and the Economic Survey 2017 have raised the projected agricultural growth for 2016-17 at 4.1 per cent.

According to government sources agriculture seems to have escaped the scars of demonetisation experienced in other sectors. Seeds were allowed to be bought by banned Rs 500 notes and farmers were allowed to withdraw up to Rs 25,000 per week to meet their expenses related to agricultural production. Also, much of (70 per cent) the required seeds were already available with farmers for rabi sowing.

The Economic Survey predicts a record food production at 135 million tonnes compared to 124.1 million tonnes in 2015-16 for the kharif crop. The area sown is 3.5 per cent higher than last year. The area sown under rabi crop, as on January 13 2017, stood at 616.2 lakh hectares which is 5.9 per cent higher than in the previous year. But on the whole it is difficult to predict the size of the crop because estimates vary. The government’s advanced estimates often tend to be over-optimistic than the private estimates and the real output can yet be quite different from the two. Thus reliable government statistics are needed which will give farmers an indication of the total crop production size, acreage and projected market demand. More accurate estimates can help farmers to plant their crops judiciously in order to get best returns.

Regardless of government claims, the problems of agriculture cannot be wished away. The prices of vegetables fell sharply after demonetisation and tomatoes were strewn on the roads because farmers were unable to sell them. Agriculture is a problem-ridden sector and nearly 50 per cent of the population depends on it while the contribution of agriculture to the GDP is only 17.5 per cent. There is a constant exodus of people leaving agriculture to work in urban areas as the income of households is not enough to sustain all family members on small pieces of land averaging 1.15 hectares. To some extent, out-migration has to be encouraged to enable agricultural rural households get higher incomes. Migrants send money home and it helps in health and education of the family. Higher rural income is vital for propping up demand for manufactures.

In recent years, the exodus from farming has been due to distressed agricultural conditions. The agriculture growth rate was 1.2 per cent in 2015-16 and shrank by 0.2 per cent in 2014-15 due to drought. This year,  even if a bumper crop is expected it could spell danger for farmers. They don’t have adequate storage and holding capacity and are themselves not able to dispose their crop directly to buyers, except in the case of contract farming. They have to go through the Agricultural Marketing Committee and commission agents, as in the case of Punjab, and therefore price realisation is not remunerative as there are many deductions from the prices paid to them.

 Agricultural marketing needs close attention and the middlemen’s grip has to be weakened. A contract farming Act, along the lines of the one in Punjab, is being drawn. A fresh draft of the APMC Act is also being proposed by the Niti Ayog in three  months. Direct purchase from farmers by private corporate players and direct sale by farmers to consumers is being planned. There is a distinct move towards corporatisation of agriculture which is controversial. Also in the new Act, there will be a single trader licence as well as a single-point levy of taxes in mandis.

Regarding agricultural outlook, some states are facing immense problems. While monsoon may have been normal for most of India, Tamil Nadu is experiencing one of the worst droughts. There have been many farmer suicides after they witnessed their dried-up crops. The irrigation problem has also not been solved. Around 60 per cent of agriculture is rain-fed and not irrigated through a network of canals. Major public works and investment are needed in irrigation, especially in drought-prone areas. The use of drip irrigation and sprinklers are needed because water is going to be a big problem in future for agriculture and domestic consumption. The Union Budget 2017 has allocated Rs 5,000 crore towards a micro-irrigation fund and Rs 1,87,223 crore for revving up the rural economy through ‘trickle down’ effect which rarely works in the case of Indian agriculture.

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The Tribune, 14 February, 2017, http://www.tribuneindia.com/news/comment/farming-goes-to-seed/363728.html


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