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Rural distress worsens across India -Sayantan Bera
-Livemint.com

Telangana 9th state to declare drought, adding to the agrarian crisis and posing a threat to the rural economy

New Delhi: Telangana has declared a drought in parts of the state, becoming the ninth state this year to do so, highlighting the agrarian crisis that could cause a likely fall in the production of rain-fed crops such as pulses, oilseeds and cotton, and result in a further slowing of the rural economy.

According to a state government order Tuesday, 231 mandals (sub-districts) spread across seven out of 10 Telangana districts—Mahabubnagar, Medak, Nizamabad, Ranga Reddy, Nalgonda, Warangal and Karimnagar—were declared drought affected.

The June-to-September southwest monsoon recorded an average rainfall of 610.8mm, as against the normal rainfall of 713.6 mm—a deficit of 14%, the government order noted.

For the entire country, the southwest monsoon recorded a deficit of 14% compared to the normal, the second straight year of sub-par rains after 2014 saw a deficit of 12%.

This year, 302 of the 640 districts in India experienced deficit rains, or at least a 20% shortfall compared to the normal.

The second consecutive drought year, punctuated by unseasonal rains that damaged India’s winter harvest in March and April, may cause a fall in farm incomes that were already affected by lower prices of key crops such as rice, wheat and cotton.

Worryingly, India is staring at a poor winter crop as a lack of soil moisture and a deficient northeast monsoon has affected the planting of wheat and pulses.

Data released by the agriculture ministry last week shows that rabi (winter crop) sowing is lagging by more than 18% compared to the normal area, with planting of wheat lower by 28%, that of pulses is down 9% and oilseeds 12% less.

A failed winter crop would mean the fourth consecutive crop failure for a majority of Indian farmers.

That could also push the agricultural growth rate to negative territory from an already dismal 0.2% seen in 2014-15.

The biggest challenge before the centre is to provide some immediate income support to farmers to revive rural demand, said Himanshu, associate professor at Jawaharlal Nehru University, Delhi, and a Mint columnist.

“This could take the form of increased spending through the rural roads or the rural employment guarantee schemes. Further, the government should be wary about food inflation as the pulses story is likely to repeat for oilseeds,” said Himanshu.

“In addition to the short-term measures, like compensating farmers for crop damage and waiving interest on crop loans, the centre should come up with an effective crop insurance scheme. Existing schemes cover banks’ loans and not the farmers risk of repeated crop loss.”

Distress caused by repeated crop failures is also showing up in rising number of farmer suicides. In Maharashtra alone, 2,234 farmers committed suicide between January and September, revealed a Right To Information (RTI) response from the state revenue department.

According to Rythu Swarajya Vedika, an umbrella organization of non-governmental organisations in Telangana that collects data on farm suicides, 1,713 farmers killed themselves from June last year till date.

Karnataka reported 516 farm suicides this year (till mid-October), according to data provided by the Congress, the ruling party in the state.

About 60% of India’s workforce is dependent on agriculture, a key sector that has seen depressed incomes for the second year in a row. This is evident in sales of tractors and motorcycles that are key indicators of rural demand. For instance, tractor sales declined by 20% during the first half of the current financial year, from 312,116 units in 2014-15 to 248,991 units this year (April-September), according to data from lobby group Tractor Manufacturers Association.

Further, motorcycle sales declined 4% year-on-year to 5.36 million units in the six months ended 30 September, according to Society of Indian Automobile Manufacturers (Siam), an industry lobby group.

Stressed farm incomes have also led to slump in rural wages, a determining factor of rural demand. Data from the labour ministry shows that growth in rural wages slowed from a high of nearly 18% in August 2013 and 17.5% in August 2014 to a dismal 3.8% this August.

Apart from Telangana, eight other states (Karnataka, Odisha, Maharashtra, Madhya Pradesh, Chhattisgarh, Jharkhand, Uttar Pradesh and Andhra Pradesh) have declared drought this year. Of these, the first six states have sought a central assistance totalling Rs.20,000 crore.

On Tuesday, after a review meeting with state agriculture commissioners, union farm minister Radha Mohan Singh said his ministry had recommended an assistance of Rs.1,387 crore for Chhattisgarh (the state asked for Rs.6,093 crore in a memorandum submitted to the centre on 5 November).

Earlier this month, the centre approved Rs.1,540 crore for Karnataka, nearly two months after the state submitted a memorandum seeking Rs.3,831 crore in central assistance.

Memoranda have been received from Uttar Pradesh and Orissa and central teams dispatched immediately, said Singh adding that states such as Andhra Pradesh, Bihar, Telangana and Jharkhand have been asked to submit their memorandum urgently.

Uttar Pradesh, in a memorandum submitted this week, asked the centre for Rs.2,057 crore, said Sudhir Panwar, a farmer leader and member of the state planning commission. “Last year the state received only 10% of what it asked for as drought relief,” he said.

While the central assistance towards relief for crop damage sounds generous on paper, in reality it barely covers farmers’ costs of production. For instance, Karnataka reported a crop loss of Rs.15,636 crore but received just about a tenth of it to distribute as immediate relief among farmers. Similarly, Madhya Pradesh has asked for Rs.2,390 crore as central relief for crop damage, while the total damage to crops in the state is estimated at Rs.13,846 crore.

According to central norms the maximum farmers can receive as compensation is a paltry Rs.2,700 per acre (in rain-fed areas), meaning compensation pays only a fraction of the crop loss.

In Telangana, several mandals spread over seven districts saw deficit rainfall along with severe dry spells that have caused withering and drying up of crops that is likely to result in drastic yield reduction of major rain-fed crops (such as pulses, millet and cotton), stated the state government order. After the drought notification, farmers will be able to restructure their loans, said B.R. Meena, Telangana’s disaster management commissioner. Additionally, the government will ensure supply of drinking water, more work through the employment guarantee scheme and fodder for livestock, added Meena.

Telangana will seek central assistance after submitting a memorandum to the centre within a week after which farmers will receive compensation for crop damage, he said.