As per the Fourth Advance Estimates for 2016-17 released by Department of Agriculture, Cooperation and Farmer’s Welfare, the country achieved a record production of food grains estimated at 275.7 million tonnes, which is higher by 10.6 million tonnes than the previous record production of food grains in 2013-14. The production of rice is estimated at 110.2 million tonnes during 2016-17 which is also a new record. Similarly, the production of wheat, estimated at 98.4 million tonnes is higher by 2.6 per cent than the previous record production achieved during 2013-14. Another significant achievement is in the production of pulses which is estimated at 23.0 million tonnes during 2016-17 and higher by 3.7 million tonnes than the previous record production achieved during 2013-14.1
It seems as if Indian Agricultural sector is growing in leaps and bounds in Government Records. But in reality, onion farmers of Madhya Pradesh; dairy farmers of Maharashtra; chilli growers of Andhra Pradesh; farmers of Cauvery Delta of Tamil Nadu and garlic farmers of Rajasthan are in frequent agitations and protests. Nearly Farmers across India are in warpath. What might be the reasons for such contradicting scenarios?
85 per cent of landholding in India is less than two hectare. The agricultural output from these small and marginal farmers is too small to take it to Mandi. The cost economics for selling it in Government Mandi is detrimental due to transportation, storage costs and Mandi charges. So, these farmers will opt to sell it to local aggregators. Later these aggregators with the produce collected from several such small farmers will sell it at Mandis. In this way, Farmers lose command over selling their produce at initial stage itself. Inability to market their commodities had lead them into a vicious cycle of indebtedness and poverty.
Monsoon failure, drought, insufficient irrigation are all common reasons for crop loss in India. But sufficient rainfall at monsoon also adds worries to farmers. Good rainfall results in bumper production leading to glut or abrupt price fall. So, whether it is rain or no rain – Indian farmers suffer. Price fall at good seasons can be averted by market forecasting and crop planning based on future demand and supply. But poor farmers lack access to market information and we have to agree that state of poor market intelligence in India.
The demand and supply mismatch of agriculture commodities will often lead to inflationary effects. Government introduced Market Intervention Scheme and Price stabilization Fund to tackle the condition. Unfortunately these measures benefits only consumers rather than producers (Farmers). Existing policies must be fine tuned to protect the farmers from market fluctuations.
Agricultural produce are not similar to industrial goods to expect constant output. Variation in agricultural output is quite normal subjected to climate uncertainty. In peak demand seasons, Government uses tools like Minimum Export price; Restriction on movement of produce; Restriction in hoarding of stocks to favor supply. But these restrictions often become counterproductive and discourage farmers to grow such ‘high’ demand crops. In addition, these domestic restrictions have made Indian products less attractive and less competitive in International markets. Indian farmers lose their foreign markets due to frequent government interventions and restrictions.
“First, outlets for farmers were narrow on account of stock limits on wholesalers and retailers and there were restrictions on exports whereas imports were more liberal on some commodities. Suggestive evidence comes from the contrasting experiences of Bengal gram, on the one hand, and arhar and moong on the other. Fewer restrictions for the former may have helped shore up market prices received by farmers. Second, weaker demand than in previous years could have weighed on prices“ – Economic Survey 2016-17 Vol II
Agricultural growth shall not be figured out from mere numbers and percentage. Growth in real terms is an aggregate growth of all farmers in a country. For a sustainable progress in livelihood of farmers and their income security, favorable market environment has to be created. Market reforms are key to double farmer income in five years.
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- Economic Survey (2017-18)