Rescuing farmers reeling under the bloodbath with sops is paramount
The ‘farm to flop’ phenomenon, unless contained, can take a fatal twist
While the price of potatoes has crashed to Rs 500 per quintal this year, from an average of Rs 1,200 per quintal last year, a farmer was quoted as saying “We cannot afford to sell potato below Rs 900 per quintal, as, at this rate, we can meet the input cost and make a small profit.”
With the prices not showing any signs of picking up, the days ahead are going to be very difficult for potato growers.
Not only in Punjab, potato prices have seen a drastic fall so far in Bengal, Bihar, Uttar Pradesh, Madhya Pradesh, Gujarat and Maharashtra. Meanwhile, potato is not the only farm debacle that is being reported these days. Prices of cauliflower, cabbage and tomato too have crashed. Not realising prices above Rs three per kg, farmers in Punjab have already started destroying their crop. “I grew it and I am destroying it. It’s very tough but what else do I do,” asks a vegetable grower.
After entailing a cost of Rs 30,000 per acre for its production, destroying the harvest comes as a severe blow to their livelihoods apart from causing insurmountable mental agony.
A week back, travelling through parts of Zaheerabad district in Telangana, I saw the same fate befall tomato farmers after what was a bumper crop. On being asked why they were not harvesting the crop, a visibly upset tomato grower reasoned that he did not wish to incur additional expenditure on plucking and transportation when the market price was around Rs 2 per kg. “Pick up as much as you can,” he told me in frustration.
This is the story of ‘farm to flop’ that I see everywhere, these days.
Nobody appears to acknowledge or even remotely feel concerned at the plight of the farming community. Why I say so is because last fortnight a report from Chhattisgarh had shown how a farmer from Mahasamund not only suffered a complete loss when he took 1,475 kg of his brinjal harvest to the Raipur mandi and was forced to pay an extra Rs 121 for transportation and other costs after deducting the price he received.
A month earlier, reports of garlic producers dumping their produce in the local rivers was all over the media; it was ditto with onion growers. If if you try to Google, you have several hundred pages devoted to media and academic reports on the distress sale of farm produce. In other words, it has been quite a regular phenomenon. Over the years, the ‘farm to flop’ story has only got bigger. The bloodbath that farmers face on the farm has simply remained confined to media pages. It hasn’t led to any serious response like what happens when the country sees a bloodbath in the stock market. I have seen the government creating a war room for the response, and the minister concerned regularly briefing the media. Nor do TV channels hold prime time panel discussions on how the bloodbath on the farm impacts farm livelihoods. Panel discussions are only reserved for the times when prices increase giving rise to inflation worries. So much so for the majority population that forms the backbone of the country’s economy.
As if this is not enough, Union Finance Minister Nirmala Sitharaman didn’t see any merit in further strengthening the market intervention scheme (MIS) that is aimed at stepping in when prices crash at times of bumper harvest or when prices fall below the cost of production at the time of the crop arrivals.
Under the Budget 2023 outlays, the allocation for Price Support Scheme (PSS) and MIS has seen a steep cut. From Rs 1,500-crore last year, the budgetary provision for MIS has been reduced to a mere Rs one lakh. I don’t think the outlay is enough to even cover the losses suffered by a handful of garlic producers.
In addition to vegetable growers, apple farmers in Himachal Pradesh and Kashmir have already threatened to take to protests if the government fails to enhance MIS outlays. If not, it will hit the annual procurement of low quality apples that the state agencies procure for processing purposes. Roughly about 60,000 to 80,000 tonnes of apples are procured every year in HP alone.
Further, remember the Operation Greens scheme launched in the 2018-19 budget with an outlay of Rs 500 crore. Although the budgetary provisions were comparatively far less than what was required, it, nevertheless, showed the intent for controlling the price volatility that tomato, onion and potato routinely encountered. Built on the lines of Operation Flood, at least that is what it claimed, the Ministry of Food Processing Industries further extended the scheme to all fruits and vegetables under the Atmanirbhar abhiyan. By te dawn of 2023, the scheme seems to be all but forgotten.
Whenever I tweet about the falling prices of vegetables (and for that matter even of fruits), the usual refrain is ‘what can be done given that these are perishable commodities’. To hear this from general public can simply be ignored but this cannot be the reason why policy makers remain indifferent. For example, let’s take a look at milk, which as a commodity is most perishable. And yet, the Operation Flood scheme has successfully addressed the issue of price volatility in milk (barring a few times) in recent memory. The same kind of approach could have been easily followed in case of fruits and vegetables with appropriate modifications.
Even in America, when prices fall they have developed a mechanism to ensure that farmers do not suffer. By providing for price-deficiency payments to numerous schemes that directly help farmers, the US administration has even developed a mechanism when milk prices crash – to urge farmers to make more cheese that can be included in the school feeding programmes. Also, there are similar programmes that have been activated during the strawberry glut. Not that everything is fine, but still attempts are being made to reduce farm losses.
In India, adequate temperature-controlled storage facilities, followed by serious efforts to re-build a value chain that rely on processing, and local outreach, needs to be worked out. This must be accompanied by a mechanism to implement a price-deficiency scheme, but caring not to repeat the earlier failure of the scheme in Madhya Pradesh, needs to be ensured. But still, more importantly, ensuring a guaranteed price for farmers to avoid any price volatility has to be the guiding spirit. Lessons have to be learnt and incorporated from the Kerala’s scheme to provide an assured price to vegetable growers.
Operation Greens therefore has a bigger challenge of not only stabilising the prices of vegetable and fruits in future for farmers but to also help enable them to make a shift towards crop diversification. Consumers already pay a high price but it is the farmers who have been squeezed dry in the bargain, even by the big organised trade. The story of ‘farm to flop’ has to change. We cannot simply go on blaming supply demand for the prevailing agrarian distress.
(The author is a noted food policy analyst and an expert on issues related to the agriculture sector. He writes on food, agriculture and hunger)