Dr. Ashwani Mahajan
Government of India announced support price for first quality paddy at Rs. 1345 per quintal for the Kharif season of 2013-14, which was rupees 50 higher than the previous year. This year the government has increased the support price by rupees 55 and made it rupees 1400 per quintal for Kharif season of 2014-15. Similarly government announced rupees 1350 per quintal as the support price for wheat for Rabi season of 2013-14, which was increased to rupees 1400 for the year 2014-15. There is a provision for periodic revision of support price for Rabi and Kharif crops in the country. Agriculture Cost and Price Commission gives its recommendations from time to time, which form the basis of the announcement of support price(s) by the government. For the year 2015-16 the commission has already given its recommendation for raising the support price for wheat for the Rabi season of 2015-16.
We understand that people are reeling under rising prices of essential goods especially food products. In the last three years, food price have increased by nearly 50 percent. It is natural that people may be wary of rising support prices for food grains, as the same may lead to further inflation, however this is not true.
Inflation not much Due to Food Grains
Some economists suggest that, to contain inflation we may import food grains. However, before really going for such a policy, we need to enquire about the real cause of food inflation in the country. If we look at the support price of wheat, the same has increased from rupees 610 in 2000-01 to rupees 1400 per quintal in 2013-14; in case of paddy, same has increased from rupees 590 to rupees 1400 per quintal in the same period. This implies that in case of wheat it was an increase of 130 percent, while in case of paddy it was 156 percent. During the same period, wholesale price index for food products increased by nearly 248 percent. Therefore we can say that food inflation in the past 13 years has not been due to giving higher support price to wheat and rice. Similar is the situation with regard to support price of other agricultural produce.
Farmers Deserting Agriculture
It is no secret that agriculture is no longer a profitable venture, which is clear from the fact that lakhs of farmers in the country have been committing suicides. Vidarbh (Maharashtra), Andhra Pradesh and many other regions are becoming centers of farmers’ suicides. Studies reveal that farmers’ suicides are basically due to farmer’s inability to repay their loans.
In other states too, where less farmers are committing suicides, agriculture is not a profitable venture there too. Farmers in large number are deserting agriculture after selling their land. Though there has been a nominal increase in agricultural production, more worrying fact is that land under agriculture has been shrinking continuously. Land is being acquired by government and even by private parties, and the same is being put into non-agricultural usage in the name of Special Economic Zones, industrialization, urbanization, universities and others. Due to this phenomenon, possibilities of further increase in production are shrinking. Rising population and rising incomes are giving rise to ever increasing demand for agricultural produce. In the absence of sufficient increase in production, rising demand for agricultural produce is becoming cause of food inflation.
Inflation is more in Fruits & Vegetables
It is observed that the proportion of food grains in people’s food basket has been declining and that of vegetables, fruits, eggs, milk, meat etc. has been rising. Due to insufficient increase in the production of pulses and edible oils, the dependence of the nation on the import these items has been raising. Though, the production of other food items namely, vegetables, fruits, eggs, meat and milk has also been increasing, however the same is again insufficient in comparison to their demand. This is leading to sky rocketing prices of these items. It is notable that the country has been importing fruits on a large scale. Rising cost in dairy sector is leading to fast rising price of milk, despite increasing production. Vegetable and fruits are being sold at much higher prices, due to imbalance in demand and supply.
Imperative to Increase Agricultural Production
In view of rising population and increasing incomes of the people it is imperative to encourage agricultural production by protecting the farmers. Farmers can be encouraged to remain in agriculture by giving them remunerative prices. There is also a need to encourage new techniques and new methods of farming. Technological development in agricultural sector is practically stalled post 1991. Most of the prominent agricultural universities and other centers are not able to make any significant headway in agricultural research, due to paucity of resources. Instead foreign companies have been pushing their agenda of imposing their techniques on Indian agriculture through these public sector agriculture research centers, by bribing and financing public sector agricultural scientists. The fact that public sector agriculture scientists are hand in gloves with multinational corporations, was exposed during recent approval of GM food crops’ field trials.
Neglect of Agriculture
It is notable that per hectare productivity in India is much lower as compared to other major producing countries. For example in the year 2010 per hectare productivity with a respect to rice was 32.6 quintals in India, which was much lower than 65.5 quintals in China and 94.2 quintals in Egypt. In case of wheat the productivity was 28.2 quintals in India as compared to 47.5 quintals in China and 76.7 quintals in England. Per hectare productivity in case of groundnut was hardly 14.9 quintals in India, which was 41.4 quintals in China. Thus we can understand that there are great possibilities of increasing agricultural productivity in India. This can be achieved only by way of using of appropriate techniques in Indian agriculture with the help of agricultural research centers. It is surprising that India has largest number of agricultural research scientists in the world and still has low productivity in comparison with other major producers. It is unfortunate that whereas 1/4th of the government budget used to be allocated for agriculture in 1980s, which has come down to hardly one percent now. Neglect of agriculture by the government is impacting the agricultural production in India. There are number of economists who think that we can import agricultural commodities in case of deficient production and thereby control inflation. However import of agricultural commodities is no permanent solution for inflation. We should understand that if agriculture ceases to be a profitable venture, and once farmer gives up farming in absence of remunerative prices, no country or group of countries in world has the capacity to feed 125 crore people of India. Therefore for the food security of the nation, protection of the farmer and farming is essential. It is imperative that special efforts be made for agricultural development and farmers are provided with remunerative prices for their produce and in no case agricultural land is used for non agricultural purposes.
(The author is associate Professor, PGDAV College, University of Delhi)
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