Multiplying woes of farmers

Author: 
Ashok B Sharma

India’s exports are facing the challenges of global recession and protectionist measures in the developed world. After two consecutive years of drought, this year’s good monsoon rains came as a blessing to the farmers. Farm production revived, but the farmers could not get the advantage as the domestic prices of produces have fallen and particularly after government’s demonetization of high value currency notes the traders are reluctant to purchase perishable commodities from farmers at remunerative prices and as a result the farmers are resorting to distress sales. The recent case of farmers throwing tomatoes in the streets of wholesale markets (mandis) instead of selling their produce to traders is a pertinent case.

On the exports front, the situation is no encouraging for the farmers. The exports many commodities like tea, rice and other cereals, cashew, oil meals, oil seeds, cereal preparations and miscellaneous processed items, meat, dairy and poultry products, leather and leather products, cotton yarn, fabrications, made-ups and handloom products have declined in April-October 2016 over the same period last year. The export of fruits and vegetables has, however, marginally increased by 0.32 per cent. Despite the prospects of a good wheat crop in this season with the area coverage increasing to 256.19 lakh hectare area and a good stock in the government holding, the import duty has been reduced to zero as the prices in the wholesale market increased by 6.88 per cent.

Marine products have, however, better prospects in export growth as per the study done by Marine Products Exports Development Authority (MPEDA). Though the marine exports had fallen from $5511.12 million in 2014-15 to $4687.94 million in 2015-16, the MEPDA expects marine products exports worth $5.6 billion in 2016-17 pinning hopes on the increased production of L Vannamei and Black Tiger Shrimp diversification of aquaculture species particularly Mangrove Crab and Tilapia. Efforts are on for quality control measures and increase in infrastructure facilities for production of value-added products.  

Owing to two successive years of drought, production of pulses which are already in short supply in the country was adversely affected. This caused sharp rise in the price of pulses in the domestic market. In the current fiscal year the government made policy intervention to persuade farmers to grow more pulses. Farmers grew more of pulses this year that resulted in a bumper crop and the prices came down in the domestic market and as a result the farmers faced the problem of “produce and perish”. The problem is that the government agency, Food Corporation of India (FCI) does not have a dedicated mandate to procure pulses from farmers in pulses growing areas at declared minimum support prices.

However, the Union Ministry of Food and Consumer Affairs decided to procure 20 lakh tonne of pulses over a period for buffer stocking to meet the eventuality of acute shortage in the country and consequent rise in prices. But till date the government could create a buffer stock of 7 lakh tone only by procuring only 3 lakh tone from farmers and importing 4 lakh tone. This shows that farmers by resorting to distress sales are causing fall in prices of pulses or in other words farmers are indirectly subsidizing the consumers, while the government is procuring pulses from abroad at high international prices.

This year the prices of pulses crashed in both the wholesale and retail markets, except that of gram dal. The price of pigeon peas (tur and arhar) declined by 28.65 per cent in retail market and by 31.20 per cent in wholesale market over the year. The prices of black gram (urad) crashed by 21.55 per cent in retail market and by 24.07 per cent in the wholesale market. The prices of green gram (moong) fell by 23.37 per cent in the retail market and by 26.33 per cent in the wholesale market. The prices of lentils (masoor) declined by 9.86 per cent in retail market and by 12.04 per cent in the wholesale market.

Pulses have been imported on government account from Mozambique (arhar and urad), Tanzania, Malawi, Denmark and Australia. Government should firm up its trade diplomacy to procure pulses at reasonable prices on government account for creating buffer stock and procure more from farmers at MSPs. Myanmar is a close neighbour of India and the government has yet to work out modalities for channelizing import of pulses, especially black matpe (urad) and pigeon pea (arhar) at reasonable prices on government account.

According to government’s estimate, pulses production in the current fiscal is likely to be 200 lakh tone still falling short of growing domestic demand by about 40 lakh tone. This is a warning bell. The pulses imports both on private and government account till October this year has been less by 0.70 per cent in value terms over the previous fiscal year. The private parties have been able to explore more markets for importing pulses like Canada, Myanmar, Turkey other than Tanzania, Mozambique, Malawi, Denmark and Australia.

While the price of milk has shown a marginal dip in the wholesale market, the prices of other perishables like potato, onions and tomato have fallen sharply in both the retail and wholesale markets.

Cooking oil is another item which is in shortage in the country. The import of cooking oil has increased marginally by 0.38 per cent by October this over the same period in the last fiscal year. The prices of cooking oil has, however, improved except that of sunflower oil which has shown a marginal dip. Our acute dependence on import of pulses and cooking oil is primarily due to the freezing of the Technology Mission on Oilseeds and Pulses that aimed at achieving self sufficiency in production and government’s relaxation of custom duty to facilitate imports. On the whole the farmers are suffering due to both the market forces and the government policies. (IPA)  

Wednesday, 4 January, 2017