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LATEST NEWS UPDATES | Need to bring farm work under modified NREGS: Gulati

Need to bring farm work under modified NREGS: Gulati

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published Published on Apr 11, 2011   modified Modified on Apr 11, 2011
Rising farm wages, which have a major impact on food prices, may force the government to devise a blueprint in which agricultural work is included under a widened ambit of a government's flagship job surety scheme, a key government official said.

"We may need to come up with some sort of a special agreement for wage payment to beneficiaries working on farms since they are privately owned," Ashok Gulati, noted farm economist and Commission on Agricultural Costs and Prices chairman, told ET, indicating that the Mahatma Gandhi Rural Employment Guarantee Act, or MGNREGA, has noticeably impacted farm wages and added to a heightening farm worker availability crisis ever since the scheme was kicked off five years ago.

If MGNREGA wages are taken as the floor price, or a sort of MSP for farm labour, then costs for this key input have shot up between 18% and 43% within a span of just one year, Gulati said, citing Labour Bureau statistics.

"I don't think we should take food price hikes lightly. We are not out of the woods. The rising trend of farm input costs will add to cost-plus inflation," Gulati said. Food inflation has moderated from a high of over 20% at the beginning of the year to about 9% now, but the decline is largely because of the so-called base effect and not any perceptible decline in prices.

In the Punjab-Haryana belt, wages have gone up by over 20% in 2010-11. Even in a state like Orissa, farm labour wages have shot up to unusually high levels. In Kerala, the rise in farm wages has been the highest, at almost 300%.

In addition to farm wages, the rising price of diesel, which fuels farm power in several states, also has to be factored in prominently by the CACP into its calculations while working out minimum support prices for key agricultural crops. A higher MSP, in turn, exerts upward pressure on food prices.

Interestingly, worries that high wages under the Centre's hallmark employment guarantee programme could impact farm labour hiring costs were expressed quite vocally even in 2006. Since then, the average wage for beneficiaries under the programme has shot up from Rs 65 a day to Rs 100 a day (since January 2009).

Yet Rural Development Minister Vilasrao Deshmukh told Parliament recently that no study to assess the impact of the MGNREGA in rural India had revealed "any adverse effect" on agricultural produce due to shortage of labour.

Contrary to his contention, a March 2011 TERI study ( NREGS and Agriculture: Manifestations and Opportunities) firmly maintains that evidence shows that employment guarantee schemes have led to an increase in the bargaining power in agricultural markets.

Anecdotal evidence points to an acute farm labour shortage that has forced mechanisation in Punjab while in Kerala frequent replanting and harvesting in rice fields had been delayed.

The Teri study recommends "a proper work calendaring" so that NREGS works are done during agricultural lean season to reduce peak season labour shortage problems. Andhra Pradesh's farm labour availability rationing response has been cited in this context. The study painted two alternative scenarios, the first of which entailed a growing trend away from farm labour in rural areas and a trend towards increasingly mechanised larger farms.

The Economic Times, 11 April, 2011, http://economictimes.indiatimes.com/news/economy/agriculture/need-to-bring-farm-work-under-modified-nregs-gulati/articleshow/7938214.cms


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