Is it fair to burden our farmers?

"The finance ministry on Tuesday said the agricultural sector would be the foundation of the country's economic growth and 'early green shoots' of economic revival are visible with pickup in agricultural procurement, fertiliser sales, energy consumption, freight movement, digital transactions and forex earnings." Procurement of wheat has been a record 38.2 million tonnes and that of minor forest produces in 16 states hit a record Rs 794.2 million. The southwest monsoon is expected to be better than normal this year according to the India Meteorological Department (IMD) which has increased planting of oil seeds, coarse cereals, pulses and cotton. "As urban India witnesses large job losses and declining incomes, businesses are looking at rural consumers of Bharat to rise to the occasion," wrote Sayantan Bera. "A wide range of businesses, from manufacturers of tractors and two-wheelers to those selling fast moving consumer goods like biscuits, beverages and soaps, are pinning their hopes on rural India." While the gross domestic product (GDP) of India as a whole is expected to contract by 4.5% this year, the agriculture sector is expected to grow more then 2.5%. Unfortunately, a bumper crop due to a good monsoon is not always good for farmers as prices drop and they are unable to recover their costs. The sudden lockdown announced on 24 March by Prime Minister Narendra Modi resulted in a precipitous drop in prices of farm products. "Farm gate prices plunged due to a supply disruption -- from transporters quoting a higher price to ferry the harvest and mandis (wholesale markets) scaling down operations -- coupled with a fall in consumer demand and petty retailers disappearing from the roadside," wrote Bera. "While farmers were selling carrots for Rs 2 per kg and spinach for Rs 5 per kg, a few hours away in Delhi and Noida, consumers were paying over Rs 30 per kg." Farmers' incomes depend on whether the government is able to buy produce at minimum support price, mandated for 22 crops plus sugarcane. Tax collections, both direct and indirect, are expected to fall this year as consumer confidence plummets and inflation expectations increase. Over 50% of Indians are dependent on agriculture, even as this sector contributes just about 15% to the GDP so it is important to support it. Fuel prices in India have been skyrocketing even as the price of crude oil in international markets has stayed below $40 per barrel. This is because India now boasts of the highest taxes on fuel in the world. This, combined with a shortage of trucks due to an absence of drivers who have returned to their villages, will naturally feed into retail prices of everything. High prices means a weaker buying power of the rupee, so the rupee may fall, especially if foreign institutional investors (FIIs) stop investing in our share and debt markets. A weak rupee will raise price of imports, including oil, raising retail inflation even further. Our poor farmers are expected to shoulder the burden of rescuing the economy. Is it fair?