Chaffing fact from fiction
There is an uncontested fact about agriculture — an efficient supply management is needed from both consumer and producer perspectives to balance the prices one pay, while other receives.
Thirty months after the Modi government came to power, the consumers are happy that prices are under control — although, pulses emerged as a stumbling block in the government’s claim. The agriculture ministry came out with 30-point achievement list to buttress the point that everything is rosy now.
Financial Chronicle analyses these achievements to find out if an efficient supply chain has been established. If not, whether the government will be able to do so in 2017?
“It is not merely the increased production, but also efficient management of available supplies that is required to minimise the prospect of non-competitive markets,” said Shashanka­Bhide, director of Madras Institute of Development Studies.
Pulses: The increase in tur dal prices, that started rising from 2015-end, was so huge that in 2016 prices of all other pulses remained high, even though the production of some pulses was higher. The government showed concern over moong prices in some pockets in Rajasthan and Karnataka dropping below the MSP level to draw a parallel as if all pulses prices have come down. The retail prices are still high and the poor cannot afford that.
Wheat: There was a sudden spurt in wheat prices in December and the government took steps like scrapping of import duty to control rates. There is no policy focus of the government as prices are allowed to be depressed when crops arrive in the market, thereby denying the remunerative price to farmers. On the other hand, prices are allowed to rise only after farmers exhaust their stocks and commodities go into the hands of traders.
The so-called market intervention to protect consumers’ and farmers’ interests has always been a late response by the government.
Rice: Due to seed innovation by researchers and use of ground water, India has been able to produce sufficient rice even in the drought years. There has not been any abnormal increase in rice prices in the last decade or so. The price increase in rice commensurate with the hike in its minimum support price (MSP) as well as other crops. The official procurement by FCI at the guaranteed price has been the sole reason for sustaining the rice production, as farmers have not shifted to other crops.
Sugar: Sugarcane farmers are sticking to the crop year after year as there is no alternative with a guarantee on both price and purchase. Sugar mills under law are mandated to buy all sugarcane that farmers harvest and also at the rate finalised by the government. Farmers know even if mills delay payment, they will ultimately clear it as the government intervenes on their behalf.
The sugar cycle, under which India had been exporting for two years followed by one year of normal production and next two years of import, seems to be over with high level of cane output. Though there is some apprehension in the industry that India will have to import sugar in 2017, the government is confident of meeting the domestic demand through previous years’ surplus and current production.
Onion: The politically sensitive commodity was in the news in 2016 because prices dropped to Re 1 a kg. Though there is some improvement now, a timely intervention by the government helped it manage the prices from shooting up to a high level. The Centre persuaded the Madhya Pradesh government to increase the area after farmers in Maharashtra cut the acreage due to low prices. Again, the government showed a prompt response in not allowing prices rise above Rs 40 a kg, but it is not equally sensitive when rates decline.
Edible oils: As long as the cheaper palm oil is available from Indonesia and Malaysia, the government is not bothered about raising the local production of oilseeds. Probably, the policy will come in case prices of palm oil flare up to an exorbitant level. Due to lower oilseeds production, India is meeting more than 55 per cent of its edible oil demand through imports by spending about Rs 60,000 crore annually. There is no change in policy seen this year.
Fruits & vegetables: The price movement of fruits and vegetables is seasonal in nature and there have been ups and downs in rates. Experts said except in onion and potato, prices of all fruits and vegetables remained under check. If one vegetable rates rise in a season, people shift to another vegetable and thereby automatically check the price.

Farmers not always get the benefit of price rise as they generally sell most of their produce within three months from harvest. The world has acknowledged that India has been able to withstand two successive years of drought with hardly any noticeable change in food inflation.

Government plan
n Crop Insurance: About 30.9 million farmers in 23 states were covered under the crop insurance in kharif 2015. But, after the Pradhan Mantri Fasal Beema Yojana was launched in kharif 2016, as much as 36.66 million farmers have been covered.
n Soil health: Against a target of 25.3 crore soil samples collection up to March 2017, 2.33 crore soil samples have been collected till December 27. It is another matter that only 4.25 crore soil health cards have been distributed to farmers so far.
n Traditional farming: A scheme was launched in 2014 to promote organic farming. The government went ahead with the scheme despite objection from Niti Aayog, which questioned the logic of subsidising the rich who are capable of buying organic products at higher prices than their normal counterparts.
e-NAM: Under this scheme, 250 mandis in 10 states have been integrated with e-NAM portal and 35,04,371.13 tonnes of agriculture produce worth Rs 7,131.21 crore has been transacted on the electronic platform as of December 27.

Irrigation: During 2013-14, 4.3 lakh hectares were covered under the micro irrigation. Whereas, during 2014-16, about 12.74 lakh hectares have been brought under micro irrigation under Pradhan Mantri Krishi Sinchayee Yojana, which is an increase of 200 per cent.
If the figure is to be believed, there could be a significant increase in production of different crops in the coming few years. The government aims to complete 99 major and medium irrigation projects with the capacity of 76.03 lakh hectare in a phased manner by December, 2019.
Apart from these major five areas, the government’s steps on developing bee keeping, farmer producers’ organisation (FPOs), joint liability groups (JLGS), horticulture, coconut, disaster relief, neem coated urea, agro-forestry, mobile applications and others are not going to have significant impact.
BJP had promised 50 per cent profit to farmers over and above the cost of production and subsequently the government announced doubling of their income in six years. The programme is yet to be rolled out. The increase in income of farmers is what every one eagerly waits for. This year, it is likely to be announced and some of the schemes may find mention in the budget.
Prabhudatta Mishra