Agri Business

A year of woes for farmers despite good monsoon

TV Jayan New Delhi | Updated on December 24, 2019 Published on December 24, 2019

Crop damage due to heavy rains, low foodgrain prices and decline in farm exports hit farmers badly

Good rains that the country received this year after many years of below-par monsoon haven’t helped farmers reap a rich harvest. Instead, the heavy rains in the second half of the 2019 monsoon season caused untold damage to farms in many parts of the country. This, coupled with a decline in agricultural exports, hit farmers badly.

Analysts estimate that 2019 kharif output may fall by 4-6 per cent because of heavy rainfall in September and October. According to a report presented in the Lok Sabha early this month by Agriculture Minister Narendra Singh Tomar, the heavy rains and floods affected 6.4 million hectares in 12 States. This came close on the heels of less-than-anticipated rabi harvest. Barring wheat and mustard, output of no rabi crop matched the expectations.

PM-Kisan

The year dawned with some good news for farmers. Following the defeat it suffered in the Assembly polls in the three major States — Chhattisgarh, Madhya Pradesh and Rajasthan — in December last year, the NDA government decided to come up with an income support scheme for farmers. The Pradhan Mantri Kisan Samman Nidhi (PM-Kisan) Yojana, announced in the interim Budget, promised to give small and marginal farmers ₹6,000 a year in three equated instalments. It was subsequently extended to all farmers with the re-election of the Narendra Modi government in May. Even though the government claimed it was a big success, the coverage is still less than 50 per cent. More importantly, by design it excludes the most needy among the farmers — tenant farmers and share croppers.

 

 

The severe damage sustained during the kharif season is expected to lead to a substantial increase in crop insurance claims. Some insurance firms fear that the claim payouts during the 2019 kharif season would be as high as 140-150 per cent of the total premium collected. The extensive loss has forced four insurance firms to exit the crop insurance sector from the current rabi season. Adding to their woes was the reluctance on the part of many State governments to pay premium subsidy on time, leading to delayed settlement of claims. The low foodgrain prices have been a major worry for farmers. The subdued domestic demand is on account of an economic slowdown and poor agricultural exports. According to the latest figures released by the Agricultural and Processed Foods Export Development Authority, India’s farm produce exports witnessed a sharp decline during the first seven months of the current fiscal. In rupee terms, the shipments were down 15 per cent to ₹61,681 crore between April and October as against ₹72,523 crore during the same period last year. Among the major export items, export of basmati rice was down by 10 per cent, while that of buffalo meat by 13.5 per cent.

Though the government launched a new pension scheme for farmers, there seems to be few takers for it. According to official figures, only 12 lakh farmers have enrolled for Pradhan Mantri Maan-Dhan Yojana, meant for farmers in the age group of 18 to 40, till November end.

This year, there was very little progress on the Electronic National Agriculture Market front, even though the government launched it with much fanfare a couple of year ago. It has not been able to add any additional mandi to the scheme this year.

Silver lining

The only silver lining this year is the prospects of a good rabi crop. The 10 per cent above-normal monsoon has filled reservoirs to the brim, which in turn, promises to elevate rabi crop productivity. This is expected to lead to a higher rabi output of 7-8 per cent, according to rating firm Crisil. While lower market supply of kharif foodgrains will push up mandi prices by over 10 per cent, higher MSP and government support for wheat (which accounts for over 50 per cent of the rabi crop output) is expected to aid price growth, leading to an expansion in the overall per-hectare farm profitability in the coming crop year.

Published on December 24, 2019
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