If this thing seems strange, then it would be fine to look at some lines of the Reserve Bank report for sure. Taking stock of the health of the economy, which was gradually getting rid of the lockdown, the Reserve Bank wrote in the Monetary Policy Report of October 2020 that economic activity in Coronabandi was severely affected but ‘normal monsoon, tremendous sowing of kharif crops and good condition of reservoir Due to this, the agricultural sector remained bright. Increased wages in the Prime Minister Garib Kalyan Rojgar Yojana and Mahatma Gandhi National Rural Employment Guarantee Scheme also increased demand in rural areas.
Remember, the GDP figures came in the midst of the Kovid-era economy. On November 27 last year, the Press Information Bureau, quoting the Ministry of Statistics and Program Implementation, wrote that in the first two quarters of 2019-20, the gross domestic product (GDP) had grown by 5.2 percent and 4.4 percent respectively but the first of 2020-21. And there was a steady decline in GDP in the second quarter. The decline was 23.9 percent in the first quarter and 7.5 percent in the second quarter. But even in the midst of this historic decline in GDP, the agricultural sector registered an increase. The agricultural sector grew at a rate of 3.4 percent in the first two quarters of the year 2020-21, just like the year 2019-20.
Area sown increased by eight and a half percent in a yearThe Reserve Bank, in its October (2020) report, reported that after record production of the Rabi crop in 2019-20, the area under sowing of the Kharif crop has increased from the south-west monsoon plummet in 2020-21 Consumption is increasing in rural areas. Prior to the Reserve Bank’s report, the Union Ministry of Agriculture and Farmers Welfare had heard the good news on the eve of Independence Day that in the year 2019-20, the area under sowing of kharif crop was 935 lakh hectare which has increased to 1015 lakh hectare in 2021. And within the year, the area under sowing of kharif crop has increased by eight and a half percent.
Production increases but does income increase?
The record of crop production and steady increase in the area under sowing of crops keeps this story of agriculture growing with little manipulation every year. Amid the breathtaking jumbo of record production, the question remains whether the income of the farmers is increasing as the production of crops increases. It is often the case that with every changing year, the cost incurred on cultivating the crop of farmers increases, but the market does not get proper and profitable prices of the crop. There is never an increase in the minimum support price and when it happens, it is not so much that there is a coincidence with the increase in inflation. Most farmers often have to sell their produce at a cost below cost. The market has its own rule, if supply is high then the price goes down.
Farmers forced to sell crops at low prices in Corona period
Take, for example, the coronation phase. Koranabandi came into force in the last week of March. It was time to sell the rabi crop. But how did the goods reach the market? The movement of vehicles was closed, the doors of the mandis were closed. People stayed in their respective areas, waiting for the lockdown to slow down. In such a situation, there was a labor of workers for cutting and hauling. The time immediately after the lockdown was heavy on the farmers. The Center for Sustainable Employment of Azim Premji University, based on a survey of the state of the months of April and May (2020), wrote in its report that about 88 percent of the farmers had to sell produce at less than the common price prevailing in the market. About 37 percent of the farmers could not bring their standing crop to the house and a total of 15 percent of the farmers could not sell it despite the surplus yield.
In Coronabandi, the farmers suffered double wounds. On the sale front of the produce and also on the cost of the crop. Due to the lockdown, farmers in states like Haryana, Punjab, Maharashtra, Andhra Pradesh and Telangana received less number of migrant farm-laborers for harvesting the rabi crop, as a result they had to spend more on harvesting than before. The expenditure on machinery used for harvesting the crop also increased. The cost increased but the goods sold in the market.
Income generating challenge
The difference between the cost and the price to be recovered from the produce has become an indelible account of the fortunes of the farmers by making the story of loss in livelihood. The government takes steps to increase the income of farmers directly and indirectly, but that does not prove sufficient. For example, take the example of Prime Minister Kisan-Samman Nidhi (PM-Kisan) scheme.
Under this scheme, farmers are given a total of Rs 6,000 in installment yearly as a support money in income. This scheme started in the year 2019 is popular, but in the matter of increasing income, this scheme is like cumin in the camel’s mouth. Only small and marginal farmers come under the ambit of this scheme. Landless farm laborers dependent on agriculture for their livelihood are not included in the beneficiaries of this scheme. Experts say that a total of 14.5 million people should be the beneficiaries of PM-Kisan Yojana but only 8 to 9 crore farmers are covered under the scheme.
Secondly, look at this number of farmers according to the state-wise payment made by the PM-Kisan Fund, a big difference is seen. For example, take the example of Uttar Pradesh, a large farmer-populated state. According to the data recorded on the government website related to the PM-Kisan Yojana, only 78 percent (2 crore 12 lakh) of the total amount of the total beneficiaries of the scheme (2 crore 71 lakh) have been paid in UP in the year 2020-21. . In Odisha, only 59 percent (23 lakh 94 thousand) of the farmers (40 lakh 49 thousand) of the beneficiaries of PM-Kisan Yojana have been paid the third installment amount. This figure is 71 percent in West Bengal and 77 percent in Gujarat. But at the other end of this link, there are also states like Madhya Pradesh, Maharashtra and Bihar where 90 percent or more of the beneficiary farmers of the scheme have received the third installment amount.
One tried way to increase farmers’ income has been to increase the minimum support price. The government tried in this direction. It was announced to increase the minimum support price (MSP) of Kharif and Rabi crops for the year 2019-20. The formula used to fix the said support price has been kept in mind that farmers should get 1.5 times the cost of the produce.
But experts criticized the fixed formula, pointing out that the formula suggested by the Swaminathan Commission in its recommendations to keep the minimum price of the crop above cost, was not followed. The Commission had said that while determining the MSP, care should be taken in estimating the cost of the crop, how much the farmer had to spend on the farm-laborers along with seeds, manure, pesticides etc. The value of the hard work of the members of the household who worked for farming should also be added and it should also be seen what rent would be gained from the cultivated land. However, according to the expert, the government did not follow such formula in determining the MSP.
The number of small and marginal farmers is the highest (82 percent) of the country’s farmer-population. The Ashok Dalwai Committee, formed to suggest a path towards doubling the income of farmers, has recorded in the second section of its 14-volume report that the average income of marginal and small farmer-families (in the year 2015-16, 2011-12 61,138). So, the math is quite simple that about 80 percent of the farmers-families of the country get only five thousand rupees a month from farming. And, in this amount, most of the farmers and families of the country cannot expect to live the same way as the newly restored peon in the government department, a citizen who earns Rs 20 thousand a month according to the seventh pay scale.
Obviously, like every time, this time too farmers will be tied to the budget. They will hope that there should be something in the budget that can keep their ever-falling or sometimes falling income, something in the budget that farmers feel that the government has really moved forward on the promise of doubling the income.