When one thinks of Indian agriculture two images invariably come to mind; that of a bare-footed farmer ploughing on a dry field and of FCI warehouses overflowing with food grains.
This dichotomy of deprivation amidst abundance portrays the true picture of Indian agriculture. Agricultural production is growing but benefits of that growth are not reaching the farmers despite repeated promises, like doubling farmers’ income.
Farmers’ lobby put the blame on low prices of farm produces. While the government has raised the MSP by 1.5 times of input cost, this has not helped the farmers’ cause much. As per the Shanta Kumar Committee, only 6% farmers get the benefit of MSP. If this is true, the raising of the MSP by 1.5 times of input costs has no meaning for the remaining 94% of the farmers. The food prices have remained low putting further pressure on farm income. In fact, retail food price index declined 2.17% last January. In February, it declined 0.66% compared to 4.44% rise in overall retail inflation.
Higher prices of farm produces would raise farmers’ income but that would not give a long-term solution. Indian agriculture needs a definite strategy to develop its land, extend mechanisation, manures and HYV seeds to raise yield rates. Low productivity is probably the main problem of Indian agriculture.
The lower yield has been affecting the overall production leading to a steady decline in agriculture’s share in GDP. The yield rate of food grains production during the last five years, between 2011-12 and 2016-17, has increased by just 3.6% or by an average 0.7% a year. In actual terms, it has increased by 75 kg a hectare from 2,078 kg/ha to 2,153 kg/ ha during this period.
This story is from the May 16-31, 2019 edition of BUSINESS ECONOMICS.
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This story is from the May 16-31, 2019 edition of BUSINESS ECONOMICS.
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