Farmers Stir Lays Bare Unjust Economic Policy

Context: Farmers’ protest is a pointer to the injustice that economic reforms have continuously inflicted on agriculture by keeping farm prices low.

Challenges of Farming Community

• Rising price volatility: resulting in distress sale and destruction of standing crops by farmers.
  • In the absence of the Minimum Support Price (MSP), there is no gauge of remunerative prices in the market.
  • Indian farmers lost Rs 2.64-lakh crore every year on being denied fair farm price.- OECD-ICRIER study (2000-16).
  • Numerous studies shows that ever since big retail came into existence, farmers’ share in food revenue has actually come down.
    • According to the US Department of Agriculture (USDA), the farmers’ share in every dollar consumers spend on food (in 2018) is only 8 %.
  • Huge arrears: The unpaid cane dues across the country amount to Rs 15,683-crore as on September, with Uttar Pradesh topping the chart.
  • Inadequacy of schemes: The prices of seasonal vegetables have by and large remained depressed despite the launch of the Operation Greens.
    • The Operation Greens scheme with an outlay of Rs 500 crore was announced in the Budget speech of 2018-19.
    • It aimed at stabilising the prices of tomato, onion and potato (TOP) comprising a larger share of an average household’s vegetable basket.
  • Challenges to diversification: Absence of assured price and effective procurement system leaves crop diversification exercise to the vagaries of market forces.

Way Forward

• Extend the dairy cooperative model for agricultural commodities: to provides at least 40 to 50% (if not 70-80% like in milk) of the consumer price to farmers.
• Ensure Minimum Support Price (MSP): for cereals and other major crops to avoid instances of distress sell/trade of agricultural commodities.

Conclusion: Policy-makers must ensure a farmer-friendly economic reform process for assuring fair price and effective procurement system.