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COVER STORY: AGRICULTURE
...As Farmers Can't Sell Foodgrains...
For Vallabhaneni
Venkateswara Rao it was the end of the road. Even after selling his seven
acres of land, the paddy farmer from Jangamgudem village in Krishna district
of Andhra Pradesh still owed the electricity authorities close to Rs 40,000.
And there were hardly any buyers for his crop of paddy. So instead of
dying a daily death, 50-year-old Rao put a noose around his neck and hanged
himself on January 2.
Jawala Singh, a small farmer from Ludhiana district
in Punjab, was not in such a miserable situation three years ago when
he sold his tractor to repay a debt. But like Rao, he also found few takers
for his crop of paddy last year. He was eventually compelled to sell it
at rock-bottom prices after waiting for almost a week at the mandi for
buyers and government agents. Neck deep in dues once again, he says, "Debt
is all that I reap with every crop."
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Fatal Attraction: Artificially high prices
of wheat and rice lure farmers to produce what is already in plenty.
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"I
have been ruined by the paddy crop."
Krushna Palli,
Bargarh, Orissa
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Krushna Palli, a marginal farmer from Bargarh
district of Orissa, should have been a happy man. The rice crop
from his small farm was reasonably good and, given the largescale
crop failure in the region due to drought, should have fetched a
good price. But Palli and thousands like him are facing penury.
As against the minimum support price of Rs 382 for a 75-kg bag,
farmers are being forced to sell rice for Rs 330 a bag. Reason:
with its godowns in Orissa up to their brim with rice from Punjab,
the FCI has not been able to buy rice from local producers.
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Ironically, bumper harvests are behind the penury
that stalks farmers like Rao and Singh. Twelve consecutive favourable
monsoons have resulted in a huge buildup of foodgrain stocks in the godowns
of the government-owned Food Corporation of India (FCI). So when there
was another bumper harvest last year, the FCI-the biggest buyer of foodgrains
in the past-was in no position to purchase any more.
"The paddy crisis was only a warning of
a gathering storm," points out agriculture economist S.S. Johl. Indeed,
wheat farmers are also faced with an impending glut. Besides, rising input
costs and stagnant realisations are eating into the profit margins of
foodgrain farmers, says Joginder Singh, who teaches at the Ludhiana-based
Punjab Agricultural University (PAU). From Rs 8,680 per hectare in 1996-97,
the profit margin in wheat cultivation dwindled to Rs 6,926 in 1998-99.
In paddy, the farmer's earning of Rs 7,640 per hectare in 1994-95 declined
to Rs 7,126 in 1996-97. Simply put, while the minimum support price for
wheat has grown eight times since 1971, the cost of production has increased
15-fold. "This gap of seven times is the real crisis," says
Punjab Finance Minister Kanwaljit Singh.
In Orissa, a 75-kg bag of rice could fetch only
Rs 330-or even less-as against the Rs 382 fixed by the government. Since
April 2000, Punjab has already sent in 50,000 tonnes of wheat and 2.4
lakh tonnes of rice to Orissa and more stocks are on their way. Orissa
Chief Minister Naveen Patnaik even wrote to the Centre, protesting against
the discriminatory treatment to Punjab, but to no avail.
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Wholesale price of
perimal rice in Delhi in Rs/quintal |
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Wholesale price in
Hapur in Rs/quintal |
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Wholesale price in
Hapur in Rs/quintal |
For the country as a whole though, the prices
of foodgrains rose much faster in the 1990s than they did ever in the
past. And that made the terms of trade (ratio of prices farmers pay for
what they buy and prices they get for what they sell) favourable to agriculture.
Even after the fall in prices in the past two years, agriculture is better
off in terms of prices than it was in the pre-1990s. But problems other
than pricing have become more pressing. Wage costs (up to 60 per cent
of the costs of agriculture) have risen fastest in the 1990s. In some
states prices of diesel, power and fertiliser have also risen somewhat.
Besides, there are still restrictions on the movement of foodgrains from
one state to another, which prevent farmers from getting the best price
for their crop.
Experts feel the crisis is an opportune time
for drastic steps. For one, the stranglehold of the Government, which
today controls power, water, fertiliser, seeds, wages and trade of agriculture,
must be loosened. Then, as Joshi suggests, a common national market must
be developed for foodgrains.
In the absence of these measures and given the
uncertainty among farmers, today's problem of plenty could turn into a
crisis of shortage after just one bad monsoon. Pockets of Madhya Pradesh,
Orissa, Gujarat and Rajasthan are already reeling under drought conditions.
-Amarnath K. Menon in Hyderabad, Ramesh
Vinayak in Chandigarh and Ruben Banerjee in Bhubaneswar
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