Diesel price spike to make kharif harvest dearer

With fuel prices on the rise, the upcoming kharif harvest season is slated to be an expensive affair for farmers, who are increasingly adopting mechanisation to tackle labour shortages and rising wages.

Though the Centre has announced a 50 per cent hike in the minimum support price (MSP) over cultivation costs for 14 kharif crops, rising diesel prices are seen adding to farmers’ expenses.

Diesel prices, which hovered around ₹69.20 a litre in Delhi on June 1, the beginning of the kharif planting season, have moved up by around 3 per cent till date. However, the increase since January 1 this year till date has been 20 per cent. Experts estimate the share of fuel in the cost of cultivation per acre at between 10 and 25 per cent.

“The escalating fuel price is making life miserable for farmers,” said Vitthal Dudhatra, President, Gujarat Pradesh of Bhartiya Kisan Sangh (BKS). “Farming is now more fuel-dependent. Due to increased mechanisation at each level of farming, the dependence on diesel has increased. And every price hike in diesel reflects on each level of farming with increased input costs,” he added.

Dudhatra, however, stated that the fuel price hike will get factored into the MSP calculation. “But for that, the purchases have to happen at MSP rate. Today, most of our crops are trading below MSP and the government procurement happens only for select crops,” he said.

Transportation costs

The impact of the rising price of diesel will be felt much more in the next two months as both kharif harvesting and rabi sowing have to happen, said Yaduvir Singh, Convenor, Bharatiya Kisan Union.

“Diesel is used maximum during this period as both harvesting and sowing are highly mechanised, particularly in the north-western States of the country. In the last two and a half years, diesel prices have gone up by more than 60 per cent. Farmers not only spend more on farming, but also for transporting produce to mandis,” Singh said.

Production costs, rentals

“The ever-rising diesel prices are breaking the backs of farmers, particularly small and marginal farmers who hire farm mechanisation services,” said Sukhwinder Singh Sekhon, General Secretary, Punjab Kisan Sabha. “Those agencies that offer rental services of farm equipment often charge much higher prices when diesel rates go up,” he said.

In Telangana, farmers fear escalation in cost of production of up to 15-20 per cent on account of the fuel price hike. “Faced with a labour shortage, a lot of farmers have shifted to mechanised farming, deploying tractors and harvesters. Rentals will go up sharply with the prices of diesel and petrol going up by the day,” T Sagar, a leader of the Telangana Rythu Sangham, has said.

“Besides, the cost of transportation too will go up at the end of the crop season. This will impact our returns,” Sagar added.

Farmers also apprehend increase in costs to transport fruits and vegetables to markets.

Farmers across the country are increasingly adopting mechanisation on shortage of labour and rising wages. Mechanisation is seen picking up at each stage of farming operations such as land preparation or sowing, spraying, harvesting and transportation of the crop to markets.

“Diesel at current levels is putting an enormous burden on farmers. Almost 70 per cent of the processes in farming are mechanised now. This results in the escalation of input costs by about 15-20 per cent. We don’t see crop realisations rise in tandem with that,” said Dudhatra.

The inflation impact, as a result of the fuel price hike, is seen as a double blow for farmers. “We are not spared from the inflation effect as costs of our daily necessities go up. On the other hand, our input costs for our farming also surge resulting in a squeeze in our profits,” he added.

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