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LATEST NEWS UPDATES | What farmers want from policy-makers -Rajalakshmi Nirmal

What farmers want from policy-makers -Rajalakshmi Nirmal

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published Published on Feb 13, 2017   modified Modified on Feb 13, 2017
-The Hindu Business Line

A realistic MSP, better market access and warehouses

Agriculture is not a profitable business in India. About 70 per cent of the country’s farmers are struggling to make ends meet. In 2012-13, the NSSO’s ‘Situation Assessment Survey of Agricultural Households’ showed that farmers who own 1 hectare or less of land see an average monthly income of ?5,247, which doesn’t even suffice to meet their household expenses.

Prime Minister Modi’s ambitious target of doubling farmers’ income over the next five years looks a challenging task. The Budget has proposed various means to achieve this objective, including market-linked price to farmer, encouraging contract farming and more funding for eNAM. But these measures will yield the desired result only if supported by the States.

BusinessLine spoke to farmers and farmer representatives for their take on how farm income can be increased.

Remunerative price

SavitriBai from Lohrapur in Bundi district of Rajasthan joined the Samriddhi Mahila Producer Company a few years back, from a women’s self-help group. She is now the Chairperson of the company and assists several self-help groups in the area in joining the producer company and getting better price for their produce. Speaking to BusinessLine, she said, “Today, farmers are forced to sell at the agent’s price. If the government fixes a price for our crops and ensures that we get that price, it will be of great help….” Asked what price she wanted for her crops, SavitriBai said, “We will be happy if we get double the cost of cultivation, only then will farming be a viable business…”

In 2006, the National Commission for Farmers (NCF) headed by Prof MS Swaminathan recommended fixing MSP for crops “at least 50 per cent more than the weighted average cost of production”. This found mention in the BJP’s election manifesto in 2014. But till now, this hasn’t been implemented. In 2015, to a PIL filed by the Consortium of Farmers Association asking for its implementation, the government replied that it cannot do it as it would distort the market.

While MSP (minimum support price) is announced for 23 crops, it is practically applied only to rice, wheat and cotton, and, even in these crops, the procurement effectively happens only in a few producer States, says a Niti Aayog report. So, it is not about just coming up with a price, but about ensuring that procurement happens at that price so that the middlemen in the trade accept it, say experts.

Asked about NCF’s MSP recommendation, Prof Swaminathan said, “Calculations were made by taking the marketable surplus available to a small farmer and his holding capacity. Most small farmers have hardly 20 to 30 quintals to sell. Their cost of production is also high due to lack of adequate irrigation. If we want the farmers to come out of the poverty trap, we have to increase their income by an attractive price as well as through crop-livestock and post harvest technology enterprises...”

Another way to ensure remunerative prices to farmers is by encouraging contract farming, the advantage being that the farmer will have a guaranteed price and also have access to quality inputs. In the recent Budget, the Finance Minister said a model law on contract farming would be prepared and States would be asked to adopt it.

The Centre’s other initiative, eNAM (electronic National Market), can also help farmers get a better price by connecting them to the consumer directly. But this initiative has been stuck because of implementation glitches. Of the 2,477 APMCs, only 250-plus have enrolled under eNAM. Even in these, only gate entry is happening electronically, the auctions are still through open outcry system.

Please click here to read more.

The Hindu Business Line, 12 February, 2017, http://www.thehindubusinessline.com/portfolio/real-assets/farm-reform/article9537574.ece


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