Indian agriculture that is mostly rural, suffers from two maladies created in urban centres – policy makers who don’t get enough inputs( and don’t know what to do with the inputs, even if they had) and a loud media that makes a big hue and cry over urban retail prices. Let me explain.
A farmer decides what to sow based on last few years’ experiences in his area, the prices he heard the crops reached in other parts, his opportunity costs, the current import-export policy, current msp and procurement plans, his long term relationships for stable incomes etc. So when you change a policy after he has committed to a crop, especially one which may reduce his income, it is equivalent of taxing him. And our Govt’s for time immemorial have been doing it in one crop or the other every season.
The Govt should be tracking the progress of the crops very closely, yet often when you look at the first and second estimates they put out, you really have little faith in it and clearly neither have they. Part of it is the callous and unprofessional way it is collected. One study on onions, showed that if X is the aggregate of acreage as sent in by the blocks, the districts’ report could vary between 1/2X to 2X and the state level could be similarly random. One year when there were hailstorms in Feb causing losses that the centre said it would partially compensate, the affected states gave acreages that exceeded the total of all 3 seasons in just Rabi!
The other part is that they don’t care what the crop size will be as long as on paper it is higher in acreage and/ or yield (to show their contribution). Crop insurers often find complete collusion between farmer and local Govt officials when it comes to claims too. Recently, one of them complained that one district submitted ZERO yield for a crop! because of this, they have zero ability or incentive to take mid crop measures to protect the farmer or the consumer.
Say the crop is going to be a bumper one, exports should be opened or promoted or more storage made available especially for horticultural crops. If it’s going to be in short supply, imports should be opened only after at least 80% of the harvest has reached markets else the farmer price goes down but the retail prices won’t come down as traders will time the imports to ensure flooding the market during domestic arrival and then manage the prices.
Apart from Bad weather, all parameters like fertiliser prices, availability of fertilisers and quality seeds, leasing/buying of equipment and machinery, etc. Are all possible to control. And yet when you travel to the interiors and they see an “educated” face, they have queries and hope for solutions on how to identify fake seeds, fake fertilizers, how to use a 10 year old soil card ( you can’t, btw).
To me the best solution is to open the markets completely. The Indian experience on exporting basmati, mangoes, grapes, pomegranates,cotton etc. Shows how stable export policies helped farmers build stable incomes. India is no longer full of illiterate farmers.
Every farmer family today has at least one mobile phone and a kid who knows how to access the internet. What they need are these.
- They need access.
- They need open policies that are not meddled with five times a season.
- They need to be able to sell pulses in countries that are now interested in vegetarianism and beef to the ones interested in it.
- They need to bench mark themselves to the best growers in the world.
- They need infrastructure that helps them compete globally.
- They don’t need an avuncular babu telling them what to grow who is nowhere to be seen when prices crash.
- They need professional organisations tracking crops and putting out reports to help them plan when and where they will sell their crop.
- They need the time to learn to navigate and plan their future.
- They deserve to be treated as the entrepreneurs they are and not as imbeciles who are led by others.
But what you need for all this, is a Govt with the willingness to do all this and a population of urban dwellers willing to put up with some discomfort on and off for a decade while things settle down.
Incidentally, a farmer whose loans are waived under a scheme, can’t access the banks again for 3 to 5 years Depending on the size of the loan. So despite urban journalists despairing over it, these farmers are aware of the costs they incur when one takes the waiver and then a loan from the market at 25-45% p.a and don’t decide to fight for it as a lark.
