Saturday, August 10, 2019

How to escape when so many are looking after them?

Prime Minister Narendra Modi's government "believes a boost to farm export is a sure-shot way to help double farmers' income by 2022", wrote SN Sharma. "Once a farm product is exported at scale, it reduces a glut in the market, there by checking a drop in prices and allowing farmers to realise better prices for their produce. "Presently, marine products, basmati rice, buffalo meat, spices and non-basmati rice make up 55% of the total agriculture export basket" and the government is "giving thrust to the cultivation of grapes, mangoes, chili, moringa, lemons and pineapples". "India's net agri-export surplus  (exports minus imports) increased from $3.7 billion in 2004-05 to about $27 billion in 2013-14", wrote Prof A Gulati. However, "The net surplus fell to $9.5 billion in 2015-16 and further to $7.8 billion in 2016-17." Global prices of agricultural products have fallen since 2013-14 making our products uncompetitive, but the main problem lies in government policies. "The inherent 'consumer bias' in these policies makes the trading environment unstable and unpredictable." "Exports are restricted through the use of minimum export prices and bans while the Essential Commodities Act is used to regulate private participation." The government procures 22 agricultural products at a minimum price so as to set a floor under market prices and prevent financial losses for farmers. However, wheat and rice are the main products procured by the government in memory of a near famine in the 1960s during which India survived on food aid from the US. Since then, the government has maintained a buffer stock of food grains in case the annual monsoon, on which our agriculture is totally dependent, fails. By June, the buffer stock had reached over 74 million tonnes, 81% above the norm. Since there is a shortage of silos to store the excessive buying by the government, India wastes about $14 billion worth of food every year, even though the nation has the largest number of malnourished people in the world. If farmers are sure of being paid for growing grains they would be reluctant to shift to other produce of which they have little experience and which spoil much more quickly. The Food Corporation of India (FCI) borrowed Rs 1.96 trillion in the last financial year  which has been kept off the official balance sheet. The main problem is the government itself. "Look at the sheer number of union ministries involved in agriculture exports: agriculture and farmers' welfare, fisheries, animal husbandry and dairy processing, food processing, micro, small and medium enterprises, commerce and industry, and even external affairs," wrote Sharma. When the Union cabinet has 64 ministers, there is no shortage of ministries looking after our farmers. They have no escape.

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