Commodity Analysis

Kisan Diwas: 2019, a washout for farmers

Rajalakshmi Nirmal Bavadharini KS | Updated on December 23, 2019 Published on December 22, 2019

None of the schemes worked wonders, nor did the plentiful rain help

December 23 is celebrated as ‘Kisan Diwas’ or ‘National Farmers’ Day’ every year, in the honour of Chaudhary Charan Singh, the fifth Prime Minister of India who was born this day.

But no farmer out there is in celebration mood. Though at the farm gate, prices have moved up in the past few months, bringing some relief, 2019 overall was a year of many challenges for farmers.

Here is a look at the things that dictated a farmer’s fortune in 2019.

Monsoon: In excess

The South-West monsoon this year was the best in 25 years, with the country experiencing an above-normal rainfall of 110 per cent of the long period average (LPA). But this did not make farmers happy as there was unusually heavy rain towards the end of the season.

States including Madhya Pradesh, Maharashtra, Gujarat, Karnataka, Kerala and Sikkim saw heavy showers and floods damaging their standing crops in September. As per data from the Agriculture Ministry, about 63.995 lakh hectares of agriculture was were affected due to landslides and floods between June and November 2019.

MSP: Not much increase

In 2018, farmers received a bounty from the Centre — the government increased MSP to provide 50 per cent return on cost of production, for all crops.

In 2019, there was not much cheer on the MSP front. The Centre kept the increase in MSP limited.

For the kharif 2019 season, MSP was increased by only 1-9 per cent. Soyabean had the highest increase, followed by ragi, jowar, sesamum and maize. But it has not given much relief to farmers as procurement has been very limited. The Centre has announced a 5-7 per cent increase in MSP this year for rabi crops.

Input costs: No relief

The year also saw farmers suffering from a steady rise in input costs, especially of labour and fodder. Inflation (WPI - wholesale price index) for fodder increased from 1-1.5 per cent in the beginning of the year to 13.03 per cent in November. Delays in the onset of SW monsoon and then heavy rain in September hit supply of fodder crops due to inundation.

Labour costs in some large agriculture States such as Maharashtra increased 15-25 per cent during the year, as per market reports. Agricultural equipment, including harvesters, threshers and tractors, too, saw a price increase of 3-5 per cent, shows WPI data. Prices of DAP urea didn’t increase much, but costs of pesticides and insecticides rose.

PMFBY: Endless problems

Pradhan Mantri Fasal Bima Yojana (PMFBY) saw a backlash during the year from farmers and activist groups, for irregularities in loss assessment and claim settlement. In the election manifesto, the BJP had promised to make the scheme voluntary, but no announcement has been made yet.

There have been complaints of dubious CCE (crop-cutting experiment) and delay in settlement of over one year in many cases —the primary reason being States not having settled their premium payments.

The total number of farmers covered under the scheme has been dropping after the first year. The number of farmers covered has dropped from four crore in kharif 2016 to 3.5 crore in kharif 2017 and to 3.36 crore in kharif 2018. Provisional numbers for kharif 2019 show the number of farmers covered as 3.21 crore.

eNAM: Status-quo

Electronic National Agriculture Market, which wanted to establish online mandis across the country and link them, has not seen much progress in the past one year. The targeted 585 markets were covered by eNAM by March 2018 itself, and since then, no new market has been added.

Further, the challenges — lack of assaying and grading infrastructure at mandis, and lack of logistics support — continue.

There is still no mechanism that has been evolved for grievance redressal. Work for all of this is under way, according to sources in the government.

Many mandis across country still continue have open-outcry auctioning; commission agents and traders form a cartel and deny the right price to farmers. While the Centre is getting ready to introduce eNAM in another 415 mandis, the performance in the existing ones is not satisfactory.

Of the 585 markets under eNAM, only those in Andhra Pradesh and Telangana have shown improvement in bid per lot and benefits of improved price to farmers. The total number of farmers registered on the platform now is 1.65 crore, an addition of about 9 lakh in 2019.

PM KISAN: Pointless

It is an income support scheme for farmers. Under the scheme, the benefit is provided to eligible beneficiaries to the tune of ₹6,000 per year, payable in three monthly instalments.

In rural areas, the poverty line threshold (the necessary minimum income to buy necessities) works out to ₹4,860 a month for a family of five; ₹6,000 a year, which is ₹500 a month for a farmer family, doesn’t mean anything at all. While the government holds that it has been paying all the registered farmers under PM KISAN, there have been complaints of delay and non-receipt of benefits by farmers.

As per government data, of the total 4.74 crore farmers registered between December 1, 2018 and March 31, 2019, 3.8 crore farmers have received all three instalments.

Of the 3.08 crore farmers registered between April 1, 2019, and July 31, 2019, close to 2.5 crore farmers have received two instalments. Note that there are actually 14.5 crore farmers in the country, so the benefit of the scheme has not reached everyone. The setback in this scheme is also that it leaves out tenant farmers and share croppers.

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Published on December 22, 2019
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