The rot in farming: on farmers agitation and sustainable pricing for their produce.We must enable a sustainable price discovery for agricultural produce
To say it is a domino effect दूरगामी प्रभाव of the loan write-offs for small and marginal farmers by the Uttar Pradesh government may be simplistic, but farmers in different parts of the country have begun agitating for waivers. In Tamil Nadu, they have given the State government two months to meet their demand for a full waiver or face a fresh agitation. Maharashtra Chief Minister Devendra Fadnavis, in the face of protracted protests by farmers, has announced a blanket loan waiver ऋण माफी for ‘needy’ farmers, with an estimated (outgo खर्च ) of 35,000 crore. In Madhya Pradesh, Chief Minister Shivraj Singh Chouhan has resisted announcing a waiver, but unveiled अनावरण किया a ‘package’ that includes a ‘settlement scheme’ to bring loan defaulters back into the credit net with interest-free loans. Farm groups in Punjab also began dharnas on Monday for loan waivers and other interventions हस्तक्षेप. Finance Minister Arun Jaitley has categorically said States must generate their own resources to fund such largesse, and the Reserve Bank of India has warned of inflationary risks from fiscal slippages देरी caused by large farm loan waivers. However, it would be short-sighted कमबीन to see the rising angst गुस्से in the farm sector as simply the desire of farmers around the country to keep up with U.P. There are deeper reasons that must be addressed holistically. The problem is price discovery. In fact, there is deflation in pulse and vegetable prices. The RBI has acknowledged that already falling vegetable prices dipped more sharply because of ‘fire sales’ following demonetisation, and pulses are cheaper because of high output on top of imports. Prices for eggs, oils, cereals and milk are moderating, and while the sharp fall in food prices has kept consumer price inflation tepid, rural distress has been aggravated. The new cattle trade rules threaten the viability of livestock and dairy farming. Banks are awash with funds since the note ban, but rural lending growth collapsed एकाएक गिरना to 2.5% in the second half of 2016-17 and even shrank in several States, including Punjab and Maharashtra. Prices of fuel used by rural households have surged for three successive months. It is this squeeze on several fronts that seems to have pushed farmers to the brink. In consultation with the States, the Centre must reconsider whether it is prudent to narrowly target low food inflation. If India wants to be the world’s food factory, its farm policy needs to recognise farmer requirements for state support. If consumers and producers can benefit from a single national market in the GST era, farmers should also have the freedom to sell their produce where and when they want — with a predictable policy framework (no flip-flops in export-import stances, for instance) that enables farm-to-fork supply chains independent of local mandis and traders. Labour and land reforms also need to be revisited to create more opportunities beyond farming, and irrigation and other infrastructure projects speeded up to boost farm productivity.