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Wednesday, March 20, 2019

Farmers distress, but is the article really fair? It quotes drought year production to show a possible gap in future supply. OTOH, 2016-17 will be a record year for food grains—pulses, wheat, rice and coarse cereals!—horticulture, livestock, tea, oilseeds. Coffee broke the record last year (normal year). Sugar has fallen but much higher UP yields bode well for future.

Secondly, it says 53% work in agriculture but it contributes only 17.5% of GDP. Records show non-farming income in rural India is increasing and people are leaving farming altogether. So, fewer people are doing farming and it's still growing at 2-4% pa. Mckinsey found non-farming jobs paid better & were better jobs. Between 2011-15, 26m left farming. NDA created net jobs. 9m left farming but 23m non-farming jobs were created. Govt has increased jobs in ancillary farming like sericulture, poultry, milk, fisheries, honey, processing, e-services to farmers, small industries —in future, solar and biofuels (govt plans for waste).

Thirdly, farming is tax-free so bumper profits are not taxed. Volatility is there in global markets as well. Contract farming esp in conjunction with food processing will help small holdings. In fact, there is a massive push for cold chains, food processing and rural roads. Enough to substantially reduce total food waste. Govt has given private sector 18mo to complete and start operations, with penalties for each month delayed. Farmers will get right infra closeby, eg milk storage at right temp. With GST, if goods can cross state lines easily, cold chains can serve a wider area, making them more viable.

Fourthly, irrigation like drips, ponds and completing large dams, channels. Compulsory drips for sugarcane saves water and benefits other farmers. MGNREGA is adding good farming infra. Money is going straight to rural workers. It means more money for rural India. Pulses will have MSP and storage. Same for cotton. Then there is soil health card, neem urea, e-agriculture incl expert demonstrations, advice. Rural wifi, telecom towers and optical fibre network to improve telecommunications. More rural banking as well as post-offices being converted to banks. 250k rural common service centres (in every GP) for people to do digital and banking tasks.

Lastly, farmers are getting subsidized inputs like fertilizer, quality seeds, new hybrids, loans, crop insurance, fisheries package, etc. E-market that worked well in Karnataka (as per the article) is going nationwide. States are using Israel and foreign help to indigenize tech and make it available at a low cost. Power ministry is connecting villages, households. It is talking about schemes for "free" irrigation pumps & regular power. The private sector is going into leasing farm machinery. Zero tilling is very impressive.

What Indian farmers really need: A total overhaul of fundamental economics of agriculture


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