State-level panels sought to fix support prices for crops

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Former MP, Y. Sivaji
Former MP, Y. Sivaji

Cost of cultivation has far outstripped compensation to farmers: Y. Sivaji

There is a need for setting up state-level commissions for fixing the minimum support prices for different crops, as varied conditions across the country renders a national-level Agricultural Costs and Prices Commission incapable of ensuring fair prices for farmers, according to Y. Sivaji, a former member of the Rajya Sabha and an expert on agriculture.

He made the suggestion to Finance Minister P. Chidambaram in New Delhi earlier this week when the latter invited him to pre-budget consultations on the farm sector along with others. Problems that arise after the announcement of the MSP and before the crop reaches the market should also be taken into account as factors such as adverse weather conditions could have a huge impact on cost of cultivation.

He said the cost of cultivation was increasing all the time for all the crops and there was no commensurate increase in the prices, worsening the agrarian crisis and leading to migration of farmers and farm labour from rural to urban areas. “Unless the great divide between the incomes of urban and rural people is reduced through innovative policies, the continuous exodus of rural people to urban areas will merely result in proliferation of slums with all the attendant problems,” he said.

Therefore, he said, urgent steps are needed to improve infrastructure, healthcare and educational facilities and opportunities for employment in rural areas. Both the Union Government and States would have to step up expenditure in rural areas.

He also wanted the Union Finance Minister to extend the policy of liberalisation to agriculture and permit free movement of agricultural produce so that the farmer can sell his produce wherever he gets a better price.

He complained to the Minister that “The Government of India frequently puts curbs on exports and ensures the prices of agricultural produce do not go up in the domestic market, ostensibly to safeguard the interests of the so-called common man in the case of foodgrains or industrialists in the case of produce such as cotton.

The States continue restrictions on free movement of foodgrains even within a State. Again, whenever the prices of agricultural produce go up because of calamities like floods and cyclone or drought, the Union Government permits duty-free imports and denies the farmer the opportunity of benefiting from higher prices. The farmer is thus at the receiving end whether he reaps a bumper harvest or a poor harvest.”

Sivaji also wondered why the Union Government, so keen on introducing FDI in multi-brand retail, was not allowing FDI in agro processing industries like tobacco-processing, as it would really help farmers. He appealed to the Government to launch a concerted drive to improve production of pulses and oilseeds and make the country self-sufficient. He also pleaded for decentralised procurement of foodgrains to bring down costs and minimise losses in storage.

He pleaded for mechanisation in agriculture to reduce drudgery and re-orientation of research to suit local needs.

He also wanted the Government to promote allied activities to supplement farmers’ income. Crop loans should be interest-free and agriculture should be introduced in the curriculum at school level and there should be reservations for rural students in professional colleges, he submitted to the Finance Minister.

(This article was published on January 4, 2013)
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