What are the challenges faced by agriculture sector in India?
Why the production of unprecedented grain food can trigger a renewed demand for medium-sized projects
The last six years have seen more and more farmers who protest against poor remuneration, even when this period has been a sustained increase in agricultural production. Are the answer of the answer?
The Ministry of Agriculture and Welfare Farmers announced the second feed calculations of the production of food cereals for 2021-22. These estimates suggest that India farmers are all ready to sign up the highest production historical record. In fact, despite the interruption induced by VOCID, exit food cereals has risen 298 million tons in 2019-20 (before Covid) to 311 million tons in 2020-21 and now to 316 million tonnes in 2021-22 .
The total production of human consumption cereals of India has grown every year from 2016-17. Over the years immediately prior to 2016-17, total production fluctuated between 245 million tons and 265 million tonnes.
Total production of human consumption cereals in India
But this sustained increase in cereals for human consumption is only part of the image. What this data does not capture is the sustained increase in the anguish of farmers even when agricultural production was increasing.
The production of food grains of India has been increasing since 2017. The challenge is now transferring benefits to farmers
How is this anomaly explained where the increase in agricultural production is accompanied by increased anguish farmer?
There are two general reasons.
One, the terms of exchange (the relative prices of the inputs and agricultural products) moved against the farmer. In other words, the increase in the prices of inputs (such as fertilizers, gas oil, electricity, etc.) exceeded the rise in the prices of agricultural products. As a result, agriculture became progressively remunerative.
Two, the non-agricultural economy, which normally damped the blow for farmers when agriculture itself was not so remunerative, began to fail after demonetization, which was closely followed by the implementation of products and tax services. To be sure, the GDP growth rate of India slowed quickly from more than 8% in 2016-17 to less than 4% in 2019-20. The events of two years since then - one seeing a strong contraction due to Covid and another seeing a recovery - they have effectively canceled each other.
These two factors explain why even before the massive agitation against the three farm laws (which have now been repealed), every year that passes Sierra more and more farmers was stirring. For example, in June 2017, six farmers died when the police opened fire against a group of farmers protest demanding better crop prices in Mandsaur, Madhya Pradesh. In the same way, at the beginning of 2019, Maharashtra saw thousands of protest by farmers who carry out a long march. There were several other outbursts by farmers from other states as well.
These two factors also explain why farmers are trapped in the demand for not only the highest "minimum support prices" (or MSP), but also a legal guarantee for medium-sized projects. In other words, MSPs should not only be released, but also make effective.
For those who do not know, MSP is the price at which the government is supposed to acquire food items / buy farmers if the market price falls below it. Medium-sized projects are announced for 23 products and are based on the recommendations of the Commission for Costs and Agricultural Prices (CACP). Actually, however, the actual acquisition varies depending on the crop and geography.
With the increase of production once again this year, and with the prices of the main agricultural inputs (especially energy prices) not only that they go up but also expects to increase even more shortly after the elections of the assembly Results of five state are announced, it is very possible that farmers can redouble their demands regarding medium-sized projects.
Therefore, should be raised MSP? In case you have legal support?
As a consequence of the derogation agricultural laws, there are two diametrically opposed points of view. For many agricultural leaders, MSP is not negotiable. For others, the call to legalization of medium-sized projects would be disastrous for agriculture, as well as economically ruinous for the government.
With the Election season ACT
With the current election season, it is not too hard to imagine that if the BJP ruler loses up and does not move the needle in the Punjab, there may be political reasons - that may or have nothing to do with economic logic - by acting On the demand for higher medium-sized projects and by legal mandate.
But what about economic factors?
In a recent article entitled "Support minimum prices in India: distillation of facts", three researchers - Prankur Gupta (University of Texas, Austin), Reetika Khera (Iit-Delhi), and Sudha Narayanan (Institute of Food Policies Research , Delhi) - have tried to make sense of the function of medium-sized projects. This article was published in the Agrarian Studies Journal (January to June 2021).
Here are three notions about medium-sized projects that tend to influence the opinions of most non-farmers.
That there are very few farmers (only 6 percent) benefit from MSP
That public procurement under MSPs only benefits great farmers
And that only the farmers of Punjab and Haryana (and, to some extent, Uttar Pradesh Western) benefit from such procedures.
This article examines the validity of each of these notions.
1. How many farmers benefit from MSP?
The estimate of 6% is derived from surveys conducted between June 2012 and June 2013 as part of the National Exhibition Evaluation of the Agricultural Household Survey Situation (NSS-SAS).
National Survey
The key factor to remember here is that not all farmer who grows rice or wheat has a "marketable surplus". In other words, many products only enough for their own consumption, especially because these are the basic grains.
When the homes that had any surplus marketed, that is, they had different from zero sales that year, the proportion of rice and wheat sellers who benefited from the sale to the purchasing system were 13 percent and 16 percent , respectively, considerably greater than the six percent cited in the discussions around MSP , "State the authors.
One of them, there are great variations between the states.
"As a example, 38% portion of rice in Chhattisgarh, and only 1% in states Bihar, Tamil Nadu and West Bengal. For wheat, this proportion is almost two-thirds (62 percent) in Punjab, followed by Haryana (39 percent), Madhya Pradesh (16 percent), and Uttarakhand (10 percent), "State of the authors.
Two, the figure 6% focuses only on the direct benefits of MSP sales for rice and wheat. "It does not take into account other MSP crops for which the acquisitions, although limited, are operative," affirm the authors, when referring to a 2016 Niti Aayog document that finds evidence to show that MSP undermines market prices, even for those They do not sell to the government.
2. What states / geographies benefit from the MSPs?
The affirmation, the authors argue, that the contract is only relevant to the farmers of Punjab, Haryana and Uttar Pradesh Western is based on the oldest data when Punjab and Haryana were practically the only providers of public rice and wheat stocks. Instead of the 2012 NSS-SAS data set, the authors use more recent data at the state level on the acquisition of rice and wheat to evaluate the most recent trends in the contracting geography.
The decreasing proportion of traditional states of total wheat and rice acquisition in the last three decades. Traditional states refer to Punjab, Haryana and Uttar western Pradesh for wheat and Andhra Pradesh for rice.
The decreasing proportion of traditional states of total wheat and rice acquisition in the last three decades.
