Fields of the future

Context:  The flashpoint between the farmers and the government over the farmer bills is rooted in the mismatch between supply and demand for crops in India.

Policy issues: based on the mismatch of supply and demand

• Demand-side necessities:
  • In order to become self-sufficient in India set up a massive Public Distribution System (PDS) for supplying wheat and rice to the vulnerable sections through ration cards.
  • To feed the PDS, Minimum Support Price (MSP) was instituted under a quasi-monopolistic buying by the central government through the Food Corporation and India (FCI).
• Supply-side challenges:
  • Subsidies: were given in electricity, use of tube wells and fertilisers to increase the yield.
  • Crop rotations: have changed in the surplus growing regions:
    • g. Punjab wheat acreage is well above 90% of the total cultivable land in the rabi season (approx. one-fourth of this being under basmati rice).
    • In Rabi season, It cannot be supplanted by pulses, oilseeds etc. Only potatoes and vegetables are more income-generating.
  • The high cost of the procurement:
    • In terms of commissions/market fee and labour and gunny bags cost is an additional 12 -13% of the procurement price.
    • The losses due to poor storage and secondary transport are additional.
  • Neglect of high-quality grains: The critical concern about keeping prices low for the middle classes in India has impaired the healthy growth of the agriculture sector.
    • Physical quotas and controls on exports came in the way for the production of quality basmati rice
    • Lack of initiatives to identify high-quality strains.

Way Forward

• Promote the production of high-quality grains: Like shifting production from normal rice to basmati and other exportable varieties
• Boost infrastructure: To increase the production of vegetables in the wheat belt and its transport to southern India, the Middle East and the Far East.
• Reduce the institutional costs and move towards a more remunerative cropping pattern: By bringing in the private sector.

Conclusion: Government should make transparent efforts to push exports consistently and not follow the stop-go policy emanating from price controls for the Indian consumer market.