Skip to main content

Thanks to MSP, a 'dysfunctional' system, Punjab farmers are richest in country

By Mohan Guruswamy*

The monthlong agitation by well provisioned and organised and mostly Jat farmers from Punjab and Haryana has gripped the attention of the nation. It is in many ways reminiscent of the agitation at Maruti’s Gurgaon plant where the permanent workers get among the highest wages paid to industrial workers in the country.
The farmers massed at the Singhu border crossing are easily the best off farmers in the country. They have for long been this nation’s pride and the underlying basis of its food security. To those of us who grew up under the shadow of shipments of PL 480 American wheat to the present when India produces far too much cereals has been quite a journey.
The per capita daily availability of cereals and pulses in 1951 were 334.7 and 60.7 grams respectively. They are now 451.7 and 54.4 grams respectively now. While the per capita availability of cereals kept rising, the availability of pulses is another story. The per capita availability plummeted to a mere 29.1 grams in 2001, thereby highlighting the cereal production focus of the national food policy.
The biggest driver of cereals production in India is the policy of Minimum Support Prices (MSP), in reality assured above market prices. Though we have 23 items with MSP listed, in practice MSP is mainly for wheat and paddy. Similar MSP incentives are not always available for pulses and oilseeds where Indian importers have got vertically integrated with overseas sellers and producers. Coarse grains and cotton don’t get any support at all, besides talk.
MSP in many ways epitomizes the dysfunctional nature of India’s food system of buy at the highest and sell at the lowest (PDS). The Public Distribution System (PDS) covers 809 million Indians which is 59% of the population (1372 million estimated 2020), and still falls short of the mandated coverage by over 100 million. Besides it is very uneven between the states.
MSP prices, instead of becoming the price of last resort, are the price of first resort. At present there is a difference of about Rs 600 a quintal between the market and MSP prices for wheat (Rs 1935). The effect of this over the years has been the over-production of cereals, excessive MSP procurement in certain regions like Punjab, Haryana and north Telangana and coastal Andhra.
This year the problem has been compounded by bumper harvests in Punjab and other states. The total paddy production in Punjab, a mostly non-rice consuming state, is expected to cross 210 lakh metric tons (LMT), an increase by almost 40 LMT over last year.
Consequently, MSP procurement has been stepped up by over 23% in states like Punjab, Haryana, Uttar Pradesh, Madhya Pradesh, Telangana and Andhra among others, where the Centre bought 411.05 LMTs paddy up to December 18 against 333.59LMT during the same period last year. 
Of the total MSP purchases of 411.05 LMT, Punjab farmers sold 202.77 LMT of paddy till November 30, which is 49.33% of total procurement in the country. Is it any surprise that government godowns are overflowing? As of September 1, stocks of rice and wheat stood at 70 million tonnes against a buffer stock norm of around 41 million tonnes.
Consequently, at least 95% of Punjab farmers are covered under the MSP procurement system. Is it any surprise then that the average Punjab farming household is the richest in the country? An average Indian farming household earns Rs 77,124 per annum; while it is Rs 216,708 in Punjab. Productivity and perennial irrigation aside, there is the fact that the average farm-holding sizes in Punjab and Haryana (3.62 and 2.22 hectares respectively) stand in sharp contrast with the pan-India farm-holding size of 1.08 hectares.
95% of Punjab farmers are covered under MSP. An average Indian farming household earns Rs 77,124 per annum, but Rs 216,708 in Punjab
Though almost 55% of the population is still dependent on it, agriculture’s share of the GDP has declined to just 13% and is falling fast. Very simply, it means that farming in general only ensures greater relative poverty. 
To make farming profitable, two things need to happen. One is that fewer people be involved in it and the other is that farm produce gets higher prices. Only rapid industrialisation and expansion of the modern sector will ensure the first, and it will take a drastic reduction in the cross web of state interferences to ensure the second.
Farmer suicides have become a metaphor for the condition of the Indian farmer. Farmers, who form 60% of the population, account for just 15.3% of suicides. According to the World Health Organisation (WHO), while the suicide rate in India, an agrarian economy, was 13 per 100,000, the rate in industrialised, rich countries was often higher or comparable – South Korea: 28.5, Japan: 20.1, Russia: 18.2, France: 14.7, Germany: 13.5, USA: 12.6. 
Suicide rates are lower in India’s poorer states such as Bihar (1.85) and Uttar Pradesh (3.02), while higher in richer states such as Gujarat (9.62) and West Bengal (18.45). Clearly there is no correlation between suicide rates and incomes.
The main proportion of the government’s outlay on agriculture goes towards subsidies, which contribute little to growth today. They benefit the rich farmers the most, while the marginal ones continue to live on the fringe.
These need to be done away with to arrive at a long-term solution. There is also a need to promote watershed management and increase the acreage under irrigation – currently only about 35% of total agricultural land is irrigated. This would reduce their susceptibility to drought and avoid crises.
A move towards freer markets and an end to the government’s attempt to jawbone producer prices are required. The frequent resort to the import of wheat or cotton or even onions at higher prices, only to keep domestic prices low, is proof of this interference. Unless agriculture is made a more profitable business, neither the poverty nor the indebtedness of the farmer will ebb.
There are other infirmities, which keep most farmers at subsistence levels. The fragmentation of holdings is a major cause, with about 83% of farmers considered small or marginal with less than 2 acres each. To compound matters, hardly any new irrigation potential has been created by the state in the last 25 years. 
All the additional irrigated holdings of the past two decades have come from private tube-wells. Two-thirds of our farmlands are still rain-fed. This clearly makes any commercial-scale farming impossible and the majority of farmers remain dependent on the rain gods and governmental lords.
---
*Well-known policy analyst; former adviser to the Union finance ministry in late 1990s. Source: Author's Facebook timeline

Comments

TRENDING

Tracing roots of Hindutva Zionism: cannon fodder for 'warped' nationalist pretensions

By Shamsul Islam*  Those who believe in a world free of hegemonic ethno-nationalism, racism, religious bigotry and hatred have rightly taken note of Zionism and its ally Christian Zionism, major perpetrators of ethnic cleansing of ‘Others’. However, the civilized world with its core belief in multi-culturalism and peaceful co-existence is oblivious to a no less dangerous threat to the present human civilization: the Hindutva Zionism. As the term reads it is part of the Hindutva world-view which stands for an exclusive Hindu India minus Muslims and Christians. The other religions like Sikhism, Buddhism, and Jainism will have no independent status but treated as part of Hinduism. The Rashtriya Swayamsevak Sangh (RSS; National Volunteer Organization) is the most prominent flag-bearer of the Hindutva politics whose cadres presently rule India, the largest democracy in the world. RSS was founded by Keshav Baliram Hedgewar (1889-1940) in 1925 who was disillusioned with the Indian freedom st

Regional parties, anti-Congress progressives, civil society groups 'joining' Bharat Jodo

By Harshavardhan Purandare, Sandeep Pandey*  The Congress party declared Bharat Chhodo (Quit India) movement against the British regime in 1942. The Congress party has now launched a movement Bharat Jodo (Connecting and Uniting India) against the Modi regime in 2022. Indian people have had a journey of 80 years since Mahatma Gandhi gave that Quit India call to the British and we have to agree that we stand most divided in our modern history when Rahul Gandhi is giving this Bharat Jodo call to the nation. And back then, Congress was a thriving idealistic political movement against the British rulers and now it is an ever weakening political organization electorally defeated several times. However, it is India at stake, not just the Congress party. That is why so many regional political parties, civil society organizations, traditional anti-Congress progressive forces like socialists and communists, intellectuals and civil servants have declared their support and are proactively partici

Shocking? No Covid vaccine trials conducted on pregnant, lactating women: RTI reply

By Rosamma Thomas*  A Right to Information applicant who sought details of safety trials conducted in India on pregnant and lactating women for three Covid vaccines in use in India – Covishield, Covaxin and ZyCov-D -- was shocked to learn from the Central Drugs Standard Control Organization (CDSCO) that Serum Institute, manufacturer of Covishield, and Cadila Healthcare, manufacturer of the ZyCov-D vaccine, had not sought permission for such trials.  Bharat Biotech, manufacturer of Covaxin, had sought permission for trial on pregnant women and later withdrawn its application. This response , provided after the applicant was initially unsatisfied with the response and went in appeal, is from the joint drugs controller, CDSCO. It was dated September 13, 2022. One researcher closely following the vaccine rollout, however, is of the opinion that the lack of a trial on pregnant and lactating women is a blessing; potential trial participants and their unborn babies thus escaped harm. Aruna Ro

Grave error? Scholar blames ex-Gujarat babu for anti-Christian riots 'citing fake report'

By Rajiv Shah  A few days back, I received a message from one of the finest former Gujarat government bureaucrats, PG Ramrakhiani, a 1964 batch IAS official, who retired in November 2000. I would often interact with him in 1997-99, even later, after I was sent to Gandhinagar as a Times of India man to cover Sachivalaya. Those were turbulent times. Shankarsinh Vaghela was the Gujarat chief minister, under attack from two sides – from the BJP, which he had left to form a separate breakaway party, Rashtriya Janata Party (RJP), one one hand, and the Congress, which was supporting him from outside, on the other. Ramrakhiani, in his message, referred to the book authored by Ghanshyam Shah and Jan Breman, both top-notch scholars who have known Gujarat in and out. Called “Gujarat, Cradle and Harbinger of Identity Politics: India’s Injurious Frame of Communalism”, I reviewed the book in January 2022.  It claims that Muslims in Gujarat have been turned into “new untouchables”, thanks to the Hin

Rajasthan cops 'halt' Gujarat Dalit women's rally: homage to untouchability victim boy

By Our Representative  In a surprise move, the Rajasthan police stopped a Dalit women's rally from Gujarat on the borders after it crossed Gujarat alleging that it would "disturb peace" in village Surana, Jalore district, where the gruesome incident of death of a Dalit boy took place on August 13 after he was brutally beaten up by his teacher on touching the drinking water pot. Sources said, while the Gujarat government had "no objection" in allowing the rally, which originated from the Dalit Shakti Kendra (DSK), an empowerment-cut-technical institute for teens founded by human rights leader Martin Macwan, on September 24 morning, the Rajasthan police stopped it for two and a half hours before allowing it to proceed to Surana. The decision to take out a women's rally was taken at a DSK meeting on September 5 following a condolence meeting of the NGO Navsarjan Trust, also founded by Macwan, activists committed to work against caste-based discrimination, orga

Excess to cheetah in Kuno to increase 'woes' of local people, 'disturb' wildlife balance

Bharat Dogra*  The release of eight cheetahs into the Kuno National Park ( Madhya Pradesh) by Prime Minister Narendra Modi on September 17, although accompanied by a media blitz, has raised several questions. The animals were flown from Namibia to Gwalior and from there they were taken to the release site in a helicopter. Official sources have stated that this is the first time a large carnivorous species has been moved across continents for establishing a new population. This first release will be followed by others under this project. However, precisely for this reason, it is important to be cautious because if such translocations have been generally avoided in the past, there may have been reasons for this and at the same time we do not have much learning experiences from the past. The Cheetah became extinct in India in 1952, although this very fast moving animal is still remembered in the folklore of many areas. Hence the first impulse is to say that trying to introduce and revive

Introducing non-native cheetahs is 'not equivalent' to restoring pride in the nation

By Bappaditya Mukhopadhyay*  The Cheetahs from the African continent has finally been introduced to India by the Indian Prime Minister on his 72nd birthday. The process had started with the previous Government in 2009. However, the Supreme Court clearance was pending owing to the objection by the National Tiger Conservation Authority (NTCA) plea to reintroduce cheetahs. Finally the clearance was obtained in January 2020 and thereafter Kuno National Park (KNP) was chosen for the reintroduction of first set of Southeast African Cheetahs. In the near future, depending upon the success story of the current reintroduction, more cheetahs from South Africa may also be introduced. This exercise has generated a lot of interest among various stakeholders with opinions on both sides galore. It is important to pose some questions that surround the whole exercise. Let us evaluate some of these arguments. The first set of arguments are quite detached from the issues of conservation as they most

'Military diplomacy': US praises Bangladesh Army for leadership role in UN operations

By Kamal Uddin Mazumder* As the Indo-Pacific region represents the world’s economic and strategic center of gravity, the Indian Ocean today is becoming the centerpiece of all geo-strategic play. Cooperation in the region is crucial to implementing the international community’s global agenda, including achieving the UN’s Sustainable Development Goals. Major powers like the US have enhanced and deepened their strategic engagement and leadership roles with countries in the region. The Indo-Pacific Army Management Seminar, or IPAMS, is a U.S. Army Pacific (USARPAC) initiated conference that is aimed at facilitating and enhancing interactions among the armies of the Indo-Pacific region. This year's 46th Indo-Pacific Armies Management Seminar (IPAMS)-2022, co-hosted by the Bangladesh Army and US Army Pacific (USARPAC), concluded in Dhaka. The objective of IPAMS is to promote peace and stability in the region through mutual understanding, dialogue, and friendship. It is the largest confer

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Older than Delhi, no other school may have witnessed so many vicissitudes as this one

By Firoz Bakht Ahmed*  Behind every book there is a writer or writers. Are the books written for the personal gratification of authors? Is the purpose utilitarian, educational or to gain public ovation? There are writers who publish books because they are inspired by a purely disinterested and fair-minded pursuit of knowledge and to clarify the issues that agitate them and society. The book under discussion   is a masterstroke on the life and times of not only an institution at Ajmeri Gate, Delhi — Anglo Arabic School — but about the complex relationship between the school and the cajoled Muslim community. Just while you are at Ajmeri Gate, supposedly, the border of Old and New Delhi, barely a few meters from the cacophony and the chaos outside the New Delhi railway station, lies an island of serenity — a school much older than New Delhi, with a wholesale machine tools market on its West, a road leading to Rajiv Chowk (Connaught Place) on the East and colourful confusion of rickshaws,