Good crop, but demand may suffer

This is an article published on August 15 in the Perspective page of the Statesman.

Former Union Agriculture Secretary Siraj Hussain opined his views on the scenario in the agriculture sector. 

Please click to see the printed version  https://epaper.thestatesman.com/c/54237992 

About Siraj Hussain, Former Union Agriculture Secretary, Government of India.

Former Union Agriculture Secretary Siraj Hussain was one of the main officers, who prepared a roadmap and formulated most of the agriculture schemes announced by PM Narendra Modi during the Modi 1.0. He also headed the Food Corporation of India—a statutory body under the Ministry of Consumer Affairs, Food and Public Distribution, which is mainly engaged in the procurement and distribution of main Rabi and Kharif crops in India. Prior to Union Agriculture Secretary post, he was the Union Secretary in Food Processing Ministry.

The 1979 batch Uttar Pradesh cadre IAS officer has also served in Uttar Pradesh in various capacities including the chief of UPSIDC (Uttar Pradesh States Industrial Development Corporation), Registrar of Cooperatives Societies and Secretary to UP Chief Minister.

In 2016 Siraj was awarded Honorary Doctorate by Acharya NG Ranga Agriculture University in Andhra Pradesh. Since his superannuation in January 2016, he has been working with ICRIER (Indian Council for Research on International Economic Relations) as Visiting Senior Fellow. Besides, he has also been engaged in research on various aspects of Indian agriculture and food processing and has authored several research papers on agriculture and rural economy. Siraj spoke to Vijay Thakur, Special Representative, The Statesman, on the issues related to farmer’s problem in the country.

Question:

Lockdown had an impact on all sector in the country. How do you see Lockdown and market slump thereafter on Agriculture and its allied sectors?

 

Answer:

The situation was very bad during the Initial days of lockdown during March. Farmers were beaten up at some places. In some places, it was reported that they were not allowed to transport their produce to market. It caused huge loss to farmers engaged in fruits and vegetable crops.

However, the government took prompt action and exempted agriculture operations from the lockdown. As a result, we had record high procurements of wheat. Farmer’s did not suffer much in the procurement process. wheat grower got MSP but Channa and Cotton crop farmers procurement was below the MSP. In nutshell procurement, this time was better than previous years.

 

Question:

It means there was little impact of lockdown and subsequent market slump on agriculture and its allied sector.

 

Answer:

No. It had a real impact on two main sectors Poultry and milk sectors. The Producers were very badly hit. Most affected were the poultry farmers, the price of a live bird, which was around Rs 85 per Kg in February-March came down to Rs 35 a bird.

So was the situation of milk producers. The bulk producers, which contributes to nearly 25 % of the milk consumption, did not buy it to that level. According to a rough estimate, the price of bulk milk price went down by Rs 10 a litre. That is why milk producers are agitating in Maharashtra.

 

Question:

Will Covid-19 have an impact on Kharif production as well?

 

Answer:

Thankfully, this time Kharif operations have taken place in time because of good and timely Monsoon. Availability of labour has increased in the farming sector as well because of the job. Direct seeding of rice has an impressing increase in Punjab. Present scenario indicates that we would have record production of Kharif this year.

 

Question

It means everything is going to be fine in the Agriculture Sector?

 

Answer:

No, The problem is probably still there. We may have the problem of plenty this time. The Record high Kharif production is good, but the purchasing power of people have gone down due to lockdown and slump in the market. The decrease in income and increasing unemployment due to COVID 19 may not generate as much demand as we had expected. Migrant labours who had gone back home are facing a tough time. They are earning less than what they used to earn in urban areas. I think it would be very difficult for farmers to get a good price for their produce.

 

Question

But then we have export options?

Answer

As regards the export of our Kharif crop major exporting crop is rice and cotton. Export of Cotton we cannot predict, as most of our cotton goes to China. Considering the present scenario, it is difficult to comment on its export.

Now coming to rice, unfortunately, Indian rice export has also been declining in the international market.

In case of rice our major importer country is Iran, thankfully it would continue to import it from India. Look at the import figure, the import of non-basmati Indian rice has come from USD 3 Billion to 2 Billion—a 33 % decline. Similar is the situation of Basmati rice—it came down from USD 4.7 billion to USD 4.3 Billion.

Globally also, the purchasing power of people has gone down. And that is our worry. I still do not think the global demand for food products would go down that much. I am not sure if we will get a better price in the international market as well.

 

Question:

What is your hope from the Agriculture Sector? What more you think the government should do to help the farmers?

Answer:

Government has taken a few good steps. They have opened up the market. Now a farmer can sell their produce anywhere in the country through E-NAM. It has allowed movement of agriculture produce anywhere in the country. If all goes well, it would bring very good results in future. New players will enter the market, would give a better price to the farmers.

Then e-commerce companies are also coming up. They would also procure directly from the farmers. The big question still remains, the private players would come only when there is demand in the market. We also have some hope from the infrastructure AgriFunds, it may have some impact. I Think government lacks long term plans for agriculture funds.

 

Question:

Modi Government had announced the plan to double farmer’s income by 2022. Do you think the government would be able to meet its target in the wake of COVID-19?

 

Answer:

I have repeated it several times that nominally income of farmers doubles every six years without any impact. This is data from NSSO surveys. In 2002-03 the average monthly income of farmers stood at Rs 2115, grew to Rs 6426 by 2012-13—an annual increase of 11.75 %. Which means regardless of massive government efforts, the nominal income has already been growing at the target set by the Modi Government, But actually doubling of real income would take 16 years to double.

And if the government is talking about doubling real income, it needs 20 % increase every year in farmer’s income. This is a real challenge, some good steps have been taken, yet I see no major long term strategy of the Modi Government in this regards.

 

Ends.