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High fuel prices singe farmers -Rutam Vora & TV Jayan

-The Hindu Business Line

Middlemen can hike prices but producers lose margins

Ahmedabad/ New Delhi:
With the sharp increase in fuel prices punching holes in agricultural incomes, a section of farmers are reviewing the mechanisation options. Diesel prices are up one-fourth over corresponding time last year.

"The cost including transportation and pump-sets operation works out to about 25 per cent of the cost of production in various crops. Fuel costs are going up each day, while crop prices are not increasing at the same pace," said Praful Senjalia, a farmer leader in Saurashtra.

According to him many farmers are considering going back to using bullocks to till their farms to reduce fuel usage.

"There is growing interest from farmers to turn to bullocks from tractors. It works out to be economical and sustainable for them," he added.

MSP ineffective

Agri-economists believe that the pace of rise in the cost of fuel is not matching the revision in the minimum support price (MSP) for various crops. As a result, the MSP has turned out to be ineffective in providing a remunerative price.

Prof Hemant Kumar Shah, an Ahmedabad-based agri-economist says, "The pace at which diesel prices go up, the Commission for Agricultural Costs and Prices doesn't take that into consideration while calculating the farm input cost. Fuel prices fluctuate every day but the MSPs are declared only once a year."

Dr S S Kalamkar, Director, Agro-Economic Research Center at Sardar Patel University in Vallabh Vidyannagar, believes that MSP in the context of daily fluctuations of fuel prices doesn't remain relevant. "The costs of cultivation declared by the Centre has a time-lag of about 2 years. It not necessarily considers the exact situation prevailing now," says Kalamkar.

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