City Sunday

Help farmers grow money

While the share of agriculture in India’s economy has progressively declined, even today the sector, directly and indirectly, occupies over 50 per cent of the country’s workforce and contributes to over 17 per cent of the Gross Domestic Product (GDP). However, the farm sector’s importance in our economic and social fabric goes well beyond these indicators as the majority of India’s poor live in rural areas where farming is the primary source of livelihood. Additionally, with a growing population and rising incomes in the cities, farmers face the burden of increasing yields and improving the quality of their produce. But, for many years now we have been beset with an agrarian crisis for a variety of reasons. The Government’s strategy, over the years, primarily focused on raising agricultural output, improving food security and providing subsidies and waivers rather than recognising the need to raise farmers’ income. While these prove helpful in the short run, they are not effective measures for the long haul as farmers continue to face the same issues that got them into a catastrophic situation in the first place.

Instead of handing out loan waivers, the  Government could help farmers by providing access to exploitation-free credit. This has been attempted but both vision and implementation have been lacking. If easy credit is available, farmers will have improved access to seeds, pesticides, irrigation facilities and even mechanisation. Since farmers typically procure all these materials via an open market as there is no State support, higher income or easy credit will enable them to produce more/better. As farm incomes reduce or stagnate over time, conversion of farmlands for alternate uses to generate money has gone up significantly in the past decade as land prices have seen a considerable uptick. After putting in all the hard work, farmers do not receive fair wages for their labours.

This has traditionally been due to unfair exploitative practices at the mandis (wholesale food markets) and a large number of middlemen across the supply chain, right from production to consumption. In addition, for years now, low global prices have hurt exports and encouraged cheaper imports, that further hit farmer incomes. A highly-fragmented supply chain and poor farm infrastructure is a contributing factor to the farm crisis as more than 50 per cent of the produce is wasted in distribution alone.

At the front end, there is very little demand insight for various crops and virtually no marketing infrastructure and at the farmers’ end, there are non-existent or poor storage facilities and additional transport and manpower costs. Due to all the contributing factors above, farmers’ incomes have either stagnated or been lower while the cost of production and support services is perpetually increasing. The farmers, despite high-interest rates, take the risk and cultivate only to be disheartened when their produce does not fetch suitable prices that cover their costs and leave something over as profit.

Only a small portion of the farm produce gets the Minimum Support Price (MSP) and more than 90 per cent of farmers are at the mercy of the traders who set the market price. As incomes become insufficient, more and more farmers face poverty. This situation discourages the current crop of farmers but more so the next generation which gravitates towards the city for better opportunities. This leads to a shortage of hands for farm activities and is a very prevalent problem in an agri-rich State like Maharashtra where a lot of the farm help and labour is being brought from other States. The lack of fair return on both financial and effort investment by farmers has led to a marked increase in farmer suicides.

To solve this crisis all controllable, supporting factors (Government policy, spending, initiatives, incentives among others) have to singly focus on helping the farmer be self-sustainable. On an average, the farmers’ income today is only `20,000 a year in 17 States or about half the country. That means that the monthly income of a farming family — with an average of five members — is less than `1,700. It is hard to imagine how farmers are surviving today with these incomes which have to suffice for supporting their families and continuing with their farm production activities. With 50 per cent of our population working in the agri sector, it is imperative to help generate more income for them both for their betterment and for the economy to keep ticking. (MR, Inputs: Agencies).

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