The Hindu Business Line : Dark side to free power for farmers

During the last few years, Tamil Nadu has witnessed sizeable growth in the industrial sector, yet the contribution from the agricultural sector has not been encouraging, despite industrial growth in many sectors being dependent on agricultural inputs, one way or the other.

If the rate of growth of the agricultural sector is not commensurate with industrial development, the overall growth rate of the economy cannot be maintained. As electricity forms a significant part of the cost of production of farm products; there is a need to ensure steady, timely and cost-effective supply of power to the farm sector without jeopardising industrial progress.

An improper subsidisation policy implemented by various political parties in order to gain political mileage has hampered the timely availability of power to the farm sector which, unless acted upon immediately, may cause irreparable damage to the economy.

Over the past few decades, electricity has been supplied to the farmers, who consume about 26 per cent of the generated power, on cross-subsidisation basis — that is absorbing a portion of the cost from other category of consumers — much below the cost of supply, in order to give fillip to the agriculture sector.

The tariff rate of Rs 250 per HP per annum for unmetered services and Rs 0.20 per unit for metered services was collected on all agricultural consumers under Tariff IV. In 2004, the then State Government went further ahead and made the supply of electricity to farmers totally free.

There existed some special schemes of priority for ex-servicemen, SCs and STs, widows and physically handicapped persons for allotment of new connections, apart from some self-finance schemes, in which the applicant pays a fixed sum of Rs 10,000 or Rs 25,000 or Rs 50,000, being the costs to get priority within the agriculture category.

Backlog in allotment

Only farmers engaged in cultivating food crops, such as rice, maize, corn, cereals, vegetables and the like, are eligible for free power. The other conditions include that the applicant should own the land, have a well with sufficient water resources and sign an undertaking agreeing to get power during night hours too.

While the public may have the impression that power is freely available to the rural voting population, the statistics reveal the dismal truth. A study (see Table) reveals that in all circles, except Chennai North, Chennai West and Kanyakumari, there is a backlog of 10 to 23 years and going by the rate at which free supply is allotted now, it may take another 30 years to provide free power to the existing applicants, leave alone future applicants.

In most cases where a power connection is allotted after a waiting period of 10-20 years, the farmer is crippled, unable to carry out agricultural operations, or he has passed on, or sold his land. Even where a power connection is allotted, the huge demand for power makes the Board supply power mostly at off-peak hours, sometimes for as little as three-four hours a day, making farmers invest in larger pumps to draw more water when electricity is available for a short while, often resorting to the practice of ‘name-plate changing’ — higher capacity motors have their labels altered to indicate lower ratings.

Farmers, in most cases, install dummy capacitors that enable them to run their three-phase motor on a single-phase supply which leads to increase in peak demand, overloading, and a lower power factor.

Right-pricing called for

The long waiting period that farmers have to suffer to obtain sanction for a new pumpset connection also results in illegal connections, thefts and pilferage, often disguised under the huge ‘transmission and distribution losses’ reported by the Board.

The free tariff or very low flat rate tariff leads to inefficient selection of crops by farmers. There is no incentive for energy conservation and they are prevented from moving to drip irrigation. One can see agricultural pumpsets running through the night, even when not required.

The Government is looking to promote industries in under-developed areas of the State. But, manufacturing industries usually depend on three-phase supply during day time. The fluctuating voltages, rostering of the supply and single-phasing, and unannounced power cuts impact production. Unless a stand-by generator can be afforded, setting up an industrial units in a rural area has become unimaginable.

At a time when the food-fuel crisis is gripping the world, there is need for mass cultivation of non-food energy crops.

However, there will not be many takers both for food crops and non-food crops, unless adequate power is available, reasonably priced with due subsidisation, and on demand, without having to wait for decades.

Apart from rationalisation of power tariff for agriculture, the government should initiate energy conservation efforts by introducing demand side management (DSM) initiatives.

While supply-side initiatives refer to augmenting power supply by commissioning more power plants, technological upgradation of power generating equipment and sourcing from independent power producers DSM measures aim at conservation of power by end-users.

Farmers should be given rebate in a paid tariff regime for installing energy-efficient pumpsets, energy-efficient foot valves, and for provision of capacitors, and encouraging substitution of PVC pipes for rusted GI pipes, as has been done in Andhra Pradesh.

Extending the high voltage lines as near as possible to the area of utilisation to avoid theft of power, provision of small capacity transformers for small user clusters and rationing the supply to such a cluster of consumers by radio frequency control are long-term demand-side management measures that must be initiated on a war footing. Installation of electronic meters may also help allow optimal night-time use.

The increasing cost of producing electricity, widening gap between demand and supply of power, the need to develop rural industrial opportunities to ensure inclusive growth, call for rethinking the policy of providing free power supply.

The need is to gradually price power for farmers, and provide them with quality power at the right time to meet the requirements of agriculture.

(The author is Joint Secretary, Tamilnadu Fireworks and Amorces Manufacturer’s Association and an Executive Comittee member of the Tamil Nadu Chamber of Commerce, Madurai.)

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