One year of Modi govt: India’s farms losing ground

  • Veerappa Moily
  • Updated: Jun 05, 2015 03:06 IST

Agriculture and irrigation, which contribute 17% of GDP and cover 49% of India’s workforce and 62.5% of India’s population, have been the worst-hit by the ‘Modinomics of Crony Capitalism’. The Rashtriya Krishi Vikas Yojna has seen a reduction in funding by Rs 7,426.50 crore. ‘The Animal Husbandry and Dairy Vikas’ scheme has seen a cut of Rs 685 crore. The same for the Pradhan Mantri Krishi Sinchai Yojna has been Rs 8,156.22 crore. Funding for the National Livelihood Mission has been reduced by Rs 1,632.50 crore.

Not surprisingly, the rate of agricultural growth has come down from 4.7% in 2013-14 to 1.1% in 2014-15, the year the BJP came to power (Economic Survey, 2015). The area under cultivation has gone down by 3.322 million hectares in 2014-15 and grain output is likely to go down from 265 million tonnes in 2013-14 to below 250 million tonnes in 2014-15.

Even agricultural exports, which increased from $7.5 billion in 2002-03 to $42.6 billion in 2013-14, will see a drop of more than 25% under the Modi government. Average realisations on kapas (unginned cotton) were Rs 3,900-4,000 per quintal this time as against Rs 4,800-4,900 obtained in 2013-14. Farmers also experienced price declines in basmati paddy (from Rs 4,100-4,200 to Rs 2,500-2,600 per quintal), soybean (from Rs 3,600-3,700 to Rs 3,000-3,100 per quintal) and rubber (from `150-155 to Rs 115-120 per kg). The crash in ex-factory sugar realisations to Rs 25 per kg from the Rs 29-31 per kg levels of the previous two years, likewise, resulted in cane payments arrears of mills to growers crossing Rs 20,000 crore.

The dual impact of lower production and falling crop realisations has translated into a contraction in rural incomes, shrunk further by cutbacks in MGNREGA (Mahatma Gandhi National Rural Guarantee Act) wage spends despite the fact that 2014-15 was a drought year. All these have, in turn, affected sales of tractors, agri-inputs, two-wheelers and a host of FMCG and consumer durables that had registered impressive growth in the past decade on the back of rising rural purchasing power.

But the Narendra Modi government may have also faltered by not taking early cognizance of the crisis signals emanating from the countryside. India’s premier farm research institute, the Indian Agricultural Research Institute, has been headless for almost 10 months now, and there have been widespread shortages and black marketing of urea because of the failure to contract imports in time for the rabi season planting. All of these point to the farm sector not receiving adequate atention.

The nation has seen the worst deceleration in the agricultural sector and consequently the NDA government has acquired an anti-farmer image. Under the NDA the decline in agriculture is quite glaring and it is to the extent of Rs 1,713 crore (from the revised estimate of Rs 26,623 crore in 2014-15 to the budgetary estimate of Rs 24,910 crore in 2015-16).

The first year of the Modi government has been a nightmare for farmers. But the BJP plans to hold 200 rallies across the country, 200 press conferences and 5,000 jan sabhas as well as many media interviews — all to acquaint the nation with its ‘achievements’.

The MGNREGA has been described as a ‘colossal failure’ by none other than Modi in Parliament. No wonder the government is systematically killing the MGNREGA by not releasing funds to the states. In 2014-15, the government did not release more than Rs 6,000 crore to the states. The net result has been a failure of the states to take up new projects and provide employment in the current year.

The number of jobs (persondays) created has seen a fall of about 300 million, about a 20% decline (1.47 billion in April-December 2013 to 1.17 billion in April-December 2014). In Assam the number of jobs under the MGNREGA fell by 6.289 million from 2013 to 2014, a 31% decline.

The UPA government pushed through the National Food Security Act to guarantee five kg foodgrain per person per month at Rs 2 per kg to 67% of India’s population. Of the 29 states and seven Union Territories, the identification of beneficiaries has been completed in only six states. The Modi government has pushed back the target of implementing the Food Security Act three times, and now it is October 4, 2015.

The Shanta Kumar Committee has suggested a reduction in the percentage of beneficiaries from 67% to 40% and conducting the purchase of foodgrain only equivalent to what is required in the PDS quota. According to the food ministry’s bulletin in December 2014, an allocation of 38.8 million tonnes of foodgrain has been made for the states. This is the same as it was before the Food Security Act was enacted, proving that the government is not keen on implementing the legislation. The net consequence is saving a subsidy of Rs 1,03,000 crore by denying the Right to Food to the Indian people.

The UPA’s increase in minimum support prices (MSPs) is not being sustained. The instrument of minimum support price, utilised by the UPA to motivate higher productivity, has been sabotaged by the NDA. The NDA government has hiked the MSPs of various crops between 1.5% and 4.5% to incorporate the increase in the cost of production for farmers. However, this increase has been marginal. A majority of rabi, kharif and commercial crops had experienced an increase in MSP from 2012-13 to 2013-14 by almost Rs 100, whereas the increase in MSP in 2014-15, when the BJP came to power, has been of Rs 50 and less.

Veerappa Moily is an MP and a former Union minister
The views expressed are personal

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