Bonus of a petty sum of Rs 50 for paddy! Are farmers beggars? Farmers should now demand and get what they deseserve
While fixing MSP of paddy, government ignored representations and agitations of farmers’ bodies, ignored recommendations of the CACP to fix MSP of paddy at Rs 1000, it also ignored recommendations of Prof. Swaminathan commission to fix MSP at cost plus 50% (which works out to Rs 1350 a quintal of paddy) to fairly compensate 600 million farmers. The Government with utter disregard to all the above representations and recommendations announced a petty amount of Rs 50 as bonus for paddy. In the case of employees, Government went out of its way to give 5 million of them more than what the pay panel recommended costing to the exchequer Rs17, 800 Crore annually and additional Rs 29,400 crore by way of arrears. Why this discrimination. It is very simple. Government does not go by the value of food for life, they do not bother about livelihood problems of farmers and their dependants; they go by the perceived threat to existence of their Government if employees are not given what they demand even though the incremental value addition is negligible and even after studies of Asian Bank reveal that they are already over paid. Such a threat to their existence is not perceived by the government even when 600 million farmers are not fairly compensated for their toil, tribulations and risks undertaken. This is the stark reality. After the CACP recommended MSP of Rs 1000, input costs like diesel prices, labour wages have sky rocketed. Farmers could not get labour during transplanting and harvesting time which was vividly chronicled by the news papers. They could not get fertilizers and had to visit shops several time, resort to agitations and on some occasions stake their very lives to get a bag of fertilisers and also lose life in the process. Government is indifferent to all these travails and tribulations of the farmers and throws at them a few rupees for all the risks they take and labour they invest.
2. Look at the record of increase in MSP of paddy for the past several years. From 1993 to 1999 the average increase was only Rs25 and the increase in the next two years was a petty amount of Rs20. During 2003-04 there was no increase at all. And look at the increase in input costs and cost of daily necessities, medical and education expenses during the very same years. There is a whopping difference between what the farmer pays for all the above and what farmer receives for his produce. The difference is succinctly put forth by the Planning Commission by candidly confessing that: “GDP per agricultural worker is currently around Rs.2,000 per month, which is only about 75% higher in real terms than in 1950 compared to a four-fold increase in overall real per capita GDP.”
3. The Standing Committee on Agriculture in their Report dated 22nd July 2008, has stated that the prices of agricultural produce received by the farmers are lower than the prices of the same prevailing in a free market and are often less than the cost of cultivation. Remunerative prices should be fixed for farmers’ produce. The focus of our development is more towards raising industrial production and recently on the service sector; this lop-sided growth of our economy is increasing the gap between the rich of the cities & poor farmers of the villages. Farmer centric policies which can only solve our food security and unemployment problem are not on the agenda of the successive governments. .
4. A study conducted by ANGRAU, Hyderabad brought out startling revelations about non-profitability of agriculture.” In order to get Rs4000 per month (equivalent to salary of a peon), a farmer needs 15 to 20 acres of dry land in Telengana and Rayalaseema areas and 5 acres wet plus 2 1/2 acres dry land in coastal area in A.P. If it is totally wet land, 10 acres of land where paddy can be cultivated is needed.”
5. The Commission headed by Arjun Segupta revealed that Average monthly income per family household (Rs./Month) from cultivation (2003) of small farmer and big farmer was Rs1578 and Rs 8321 respectively. In comparison, the lowest paid government employee now gets pay and perks exceeding Rs 10,000 per month. The NCF recommended that the “net take home income” of farmers should be comparable to those of civil servants. There is absolutely no comparison between the paltry amount a farmer gets for producing life sustaining food to the pay and perks of bureaucrats. How can such wide disparity be justified in economic terms? Such wide unacceptable disparities in farm and non farm incomes have occurred mainly because agriculture produce is under priced for decades and the amount is transferred as subsidy in a disguised form to organized sector including government employees whose productivity increased only nominally, with successive pay raises. Can this be sustained in a democratic society wedded to inclusive growth? Even politically agri workers are in majority
6.From all the above data and observations it is abundantly clear that the successive government which came to power on the promise of improving the lot of farmers have studiously ignored farmers’ welfare and catered to the needs of non-farm sectors and to the organized & articulate urban consumers at the cost of farmers. Why is this happening in a democratic country decade after decade resulting in decadence of agriculture and culminating in the suicides of the farmers even though they form majority of the population and majority of voters? This is a very serious matter affecting livelihood of the farmers and agricultural workers which should be discussed, debated and farmers should determinedly decide as to future course of action to redress their grievances and to better their lot by their own strength and with a will to change their destinies for the better by themselves by using their vote power.

Miniscule share of food grain prices in Inflation flare up
Inflation has crossed 12% mark and every one, as usual, pointed the accusing finger at food prices without any confirming data. A detailed analysis made by IIMK shows that increase in food grain prices is not the cause of hyper inflation. Average increase of food articles up to Aug 2008 was only 5% compared to price raise of 13.50% of non-food articles, 14% mineral oils and 15% basic metals. In fact the average inflation rate of 9 per cent recorded for food articles between December 2006 and August 2007 was much higher than in 2007-08. So much for the scare created that food grains are becoming scarce and therefore exports must be banned and traders should not be allowed in the mandis. There was of course price raise of edible oils (14.80%). The root cause of the high inflation of edible oils was larger edible oils imports since November 2007 at soaring international prices.
Over the years, India has emerged as one of the largest consumers and importers of edible oils in the world. Presently, India accounts for 10 per cent of the world edible oil consumption and 14 per cent of world imports. The per capita consumption of edible oils, which was around 7.5 kg per annum in mid-1990s, is now over 11 kg .Our dependence on imports has increased considerably over the years from 17 per cent of the consumption requirements in mid-1990s to nearly 40 per cent now .
During 2006-07, the production of oil seeds declined by 13 per cent from 27.98 million tonnes in the previous year. As the higher imports have occurred against rising international prices of edible oils, the result was higher domestic edible oils prices.
Since 2002 world edible oil prices have been gathering an upward momentum and during the last one year the prices have hit the roof. The global year-on- year edible oils inflation was in the range of 100.6 per cent to 104.3 per cent in March 2008 (over March 2007). In June 2008 (over June 2007), the same figure was in the range of 50-83 per cent. A combination of factors – higher demand for vegetable oil from the biofuel industry, an upward movement in crude oil prices and the rising demand from the consumption markets such as India and China – has been responsible for the oils market. This is despite the world witnessing higher edible oils output during the last few years. Even in the latest report on inflation as on 26th Sep 2008, it was stated that there is decline in prices of bajra, maize, masur, gram, moong, raw wool and cotton, tomatoes, onions, dry chillies, black pepper and Inflation of 30 essential commodities is only 7.74%.
So what is the moral of the story? Stop blaming high inflation on prices of food grains and essential commodities. Do not scapegoat farmers for hyper inflation. Lift ban on export of food grains and restore custom duties on import of palm oil. Restore futures trading. Take steps to increase production of oil seeds by focusing on developing improved variety of seed material, 100% seed replacement and invest more in improving dry land farming.