Yearly Archive December 19, 2020

ByRamanjaneyulu GV

MSP — the factoids versus the facts

Reetika KheraSudha NarayananPrankur GuptaDECEMBER 19, 2020 00:02 ISTUPDATED: DECEMBER 19, 2020 10:00 IST

The debate on agricultural issues must take into account the changed geography of procurement and the seller’s profile

According to one definition, a factoid is “an item of unreliable information that is reported and repeated so often that it becomes accepted as fact”. After the passage of the three controversial farm laws, the Minimum Support Price (MSP) — not mentioned in the laws — has gained a lot of attention. The predominance of factoids about MSP and procurement has meant that the debate has yielded more chaff than grain.

The MSP is meant to set a floor below which prices do not fall, and is announced by the government for 23 commodities. It is the price at which the government ‘promises’ to buy from farmers if market prices fall below it. In fact, however, government procurement is heavily concentrated on wheat and rice, with other crops barely being procured.

Also read: PM ‘attacked’ farmers, told ‘lies’ about MSP, say farm groups

Over the years, factoids about the MSP and government procurement have gained so much traction that the retired gentleman in the local park cites them as facts. These pertain to how many have benefited from the MSP and who has benefited from it. According to these popular beliefs, few (6%) farmers benefit, only large farmers benefit, and only farmers of Punjab and Haryana (to some extent, western Uttar Pradesh) benefit.

More States under MSP

In a forthcoming paper, we use data on State-wise procurement from the Food Corporation of India (FCI) and agricultural household data for 2012-13 from the National Sample Survey (NSS), after which these data are not available, to set the record straight on these three factoids.

One, the 6% figure from the NSS data 2012-13 relates to paddy and wheat alone. Even here, however, among those who sold any paddy/wheat, the numbers are higher — 14% and 16%.

Two, the Government of India has made a systematic effort to expand the reach of MSP to more States, via the Decentralized Procurement (DCP) Scheme. Introduced in 1997-98, it was not very popular in the initial years and began to be adopted by States in earnest only around 2005. Under the DCP scheme, the responsibility of procurement devolved to the State governments which were reimbursed pre-approved costs. FCI data suggest that by July 2015, as many as 15 States had taken up this programme, though not all were implementing it with equal enthusiasm. Largely on account of it, procurement began moving out of ‘traditional’ States (such as Punjab, Haryana, western Uttar Pradesh). Until 2000, barely 10% of wheat and rice was procured outside the traditional States. By 2012-13, the share of the DCP States rose to 25-35%.

In the case of paddy, Chhattisgarh and Odisha have been the star performers. These States today contribute about 10% each to the total paddy procurement in the country. For wheat, decentralised procurement has taken off in Madhya Pradesh in a big way, accounting for approximately 20% of wheat procurement. In 2020-21, wheat procurement from Madhya Pradesh surpassed that from even Punjab. Among agricultural households which sell paddy under the procurement system, while 9% and 7% come from Punjab and Haryana, 11% are in Odisha and 33% are in Chhattisgarh. An overwhelming majority of agricultural households selling wheat to the procurement agencies come from Madhya Pradesh (33%) compared to 22% from Punjab and 18% from Haryana. That only Punjab and Haryana farmers have benefited from the MSP is now truly a thing of the past.

Which farmer benefits

Three, as per the factoid, only large farmers have benefited. In fact, procurement has benefited the small and marginal farmers in much bigger numbers than medium and large farmers. At the all-India level, among those who sold paddy to the government, 1% were large farmers, owning over 10 hectares of land. Small and marginal farmers, with less than 2 hectares accounted for 70%. The rest (29%) were medium farmers (2-10 hectares).

In the case of wheat, 3% of all wheat-selling farmers were large farmers. More than half (56%) were small and marginal farmers.

In Punjab and Haryana, the share of small and marginal farmers is not insignificant (38% and 58%, respectively, among paddy sellers). In the non-traditional States that adopted the DCP scheme, the overwhelming majority of farmers who sell to State procurement agencies are small and marginal. In Chhattisgarh and Odisha, for example, small and marginal farmers comprise 70-80% of all sellers to government agencies. Similarly, in Madhya Pradesh, nearly half (45%) of those who sell wheat to government agencies are small or marginal farmers.

To recap, the facts are as follows: one, the proportion of farmers who benefit from (even flawed) government procurement policies is not insignificant. Two, the geography of procurement has changed in the past 15 years. It is less concentrated in traditional States such as Punjab, Haryana and western Uttar Pradesh, as DCP States such as Chhattisgarh, Madhya Pradesh and Odisha have started participating more vigorously. Three, perhaps most importantly — it is predominantly the small and marginal farmers who have benefited from the MSP and procurement, even if the size of the benefits may be larger for larger farmers. This is true not just in the DCP States, but also in the traditional States.

The true picture

Getting the facts right is an important first step in resolving the issues facing the agricultural sector and farmers’ issues. We have picked three factoids of many as an illustration of how little we know about how the MSP works. The range of claims made regarding, for example, the consequences of the MSP on diversification need to be examined as well. Among Punjabis who cultivated any crop, 21-37% did not grow paddy and wheat. Among all agricultural households including those which did not cultivate a crop (indicating more diversified sources of agricultural income), a larger proportion (58 and 48%, respectively) stayed away from paddy and wheat, suggesting that procurement in Punjab may not have prevented diversification to the extent we imagine.

Similarly, confusion reigns about other areas of interest from the point of view of the new farm laws. It is widely believed that for the first time, the new laws allow farmers to sell outside the Agricultural Produce Market Committee (APMC). Even for commodities for which MSP is announced, the proportion of sales via the mandi range is only between 10-64%; the demand for the MSP originates because the prices paid outside the mandi tend to be much lower. Countrywide, sales to mandi or government procurement agencies fetched on average 13.3% higher prices for paddy and 5.8% for wheat.

We are not unsympathetic to those who question the heavy concentration of wheat and rice in government procurement (millets are better suited to agro-climatic conditions prevailing in large parts of the country, more nutritious and also grown by small and marginal farmers), to the flaws in the current mandi system, or how the MSP is implemented. Yet, the debate — popular, academic or political — on these issues must take into account the changed geography of procurement and the profile of the seller.

Prankur Gupta is at the University of Texas, Austin; Reetika Khera is at the Indian Institute of Technology Delhi, and Sudha Narayanan is at the International Food Policy Research Institute (IFPRI), Delhi

ByRamanjaneyulu GV

36.2020 09-09-20 vepada farm advisory

Text Message

వరిలో నత్రజని లోపనివారణకు అజోల్ల (Azolla) జీవన ఎరువు 4 Kg/ఎకరా వేయాలి

ByRamanjaneyulu GV

36.2020 Vepada Farm Advisory


Text (SMS)

వరిలో జింక్ లోప నివారణకు చింతాకు కషాయం1% వారంలో 2సార్లు సాయంత్రం పిచికారీ చేయాలి.బెండలో తెల్లదోమ నివారణకు వావిలకుకషాయం పిచికారిచేయాలి

Voice Message -Telugu

ByRamanjaneyulu GV

SBI report says rural economy is losing steam, flags rising unemployment and fall in wages

For 12 Indian states, the loss in state GDP in the current fiscal is mainly due to the rural areas, says the research report by State Bank of India.

REMYA NAIR 3 September, 2020 7:37 pm

Representational image | Commons

New Delhi: India’s rural economy may be losing steam after leading the economic recovery in the first few months of the pandemic, a research report released by the State Bank of India said.

Rural unemployment rate has started rising again in August, while employment and average wages under the national rural employment guarantee scheme have fallen, the report released Thursday said (see graphic).

Graphic: Soham Sen
Graphic: Soham Sen
Graphic: Soham Sen
Graphic: Soham Sen

The report also pointed out that for 12 Indian states, more than two-thirds of the loss in gross state domestic product (GSDP) in the current fiscal was contributed by rural areas.

Chhattisgarh, Assam, Himachal Pradesh, Bihar, Odisha, Andhra Pradesh, Telangana, Uttar Pradesh and Madhya Pradesh are among the states that are seeing a substantial loss in the GSDP contributed by rural areas.

According to the report, in states like Chhattisgarh, Assam and Himachal Pradesh, more than 90 per cent of the GSDP loss is from rural areas. Bihar at 86 per cent, Odisha at 84 per cent, Uttarakhand at 79 per cent, Rajasthan at 75 per cent, Andhra Pradesh, Telangana and Madhya Pradesh at 71 per cent and Uttar Pradesh at 65 per cent are among the other states with high output losses from the rural sector.

Agriculture was the only silver lining

The report’s findings come at a time agriculture and rural demand are expected to be the only silver linings for the Indian economy battling Covid-19 and the economic impact of the initial two-month lockdown as well as the intermittent lockdowns announced by many states to curb the pandemic.

The GDP data released last week had also shown that agriculture was the only sector that reported a positive growth at 3.4 per cent in the April-June quarter. Other sectors such as construction, manufacturing, and hotels and transport had reported sharp contractions by 50 per cent, 39 per cent and 47 per cent, respectively.

The RBI, in its annual report released last month, had also pointed out how urban consumption demand has suffered a bigger blow than rural demand. Citing tractor sales and motorcycle purchase data, it had pointed to improved rural recovery but added, “A fuller recovery in rural demand is, however, being held back by muted wage growth which is still hostage to the migrant crisis and associated employment losses.”

It had expressed hope that increased employment generation in rural areas under the Pradhan Mantri Garib Kalyan Rojgar Abhiyaan and increased wages under the Mahatma Gandhi National Rural Employment Guarantee Act would provide a fillip to rural incomes.

The SBI, in its report, however, said mixed signals are emerging.

Tractor sales and two-wheeler sales increased in July and August but fertiliser sales and diesel consumption declined in recent months, the report said.

ByRamanjaneyulu GV

Kisan Mitra Farm Advisory Launch

Today Kisan Mitra Farm Advisory Services were launched for Vepada Mandal, Vijayanagaram Dist, Andhra Pradesh. The first message was sent by Sri. GR Chintala, Chairperson, NABARD in Hyderabad. The program is also attended by Sri. Sudhir Kumar Jannawar, CGM, NABARD Regional Office (AP) and Sri. Y. Krishna Rao, CGM, NABARD Regional Office (Telangana), officials from NABARD Andhra Pradesh, Telangana were present. Farmers from Vepada Mandal who are members of Vepada Tribal farmers producer company, Haritha farmer producer company, Harish, DDM, NABARD Vijayanagaram district were joined in the occasion via zoom.

Kisan Mitra Farm Advisory is an attempt to provide farm advisories in local language, based on the local observations with solutions using local resources. The detailed process of how the local weather, pest and disease surveillance is taken up is given here

The advisories are given twice a week through posters, SMS in telugu and Voice message in telugu. This week Advisory can be accessed here

Photographs from the occasion

ByRamanjaneyulu GV

35.2020 Vepada Farm Advisory

Advise Poster

Text message

రైతులకు నాబార్డు/CSA వారు స్వాగతంతో అందిస్తున్న సూచన, వరిలో కాండం తొలిచే పురుగు ఉధృతి ఎక్కువ అవుతోంది. రైతులు లింగాకర్షక బుట్టలు ఎకరాకు 10-12 ఏర్పాటు చేయాలి, 5 శాతం వేప కషాయం పిచికారి చేయాలి

Voice Message

ByRamanjaneyulu GV

Multilayer cropping model under NREGS in AP

AP Government has brought in multilayer cropping models under NREGS in clusters where AP Community Managed Natural Farming is implemented.

a total of Rs. 2.15 lakhs per acre would be spend over 3 years. This will help small and marginal farmers to have integrated organic horticulture models in their farms.

ByRamanjaneyulu GV

Food, Agriculture and Nutrition Report 2020

TCI’s 2020 report on Food, Agriculture, and Nutrition in India (FAN 2020) provides an analysis of India’s progress towards achieving the second sustainable development goal—zero hunger. Using district-level data and maps, the report highlights stark spatial differences in the extent of the hunger problem and identifies potential paths forward.

In recent decades, India has made significant progress in reducing hunger, at least in terms of calories. But about 210 million Indians remain undernourished, while many others suffer from micronutrient deficiencies and obesity.

The report provides a detailed assessment of the prospects for improving productivity and farm incomes across India’s highly varied agroecologies and cropping systems. It emphasizes the need for continued high-level investments in agricultural infrastructure and research to sustain past gains and exploit new opportunities for growth. FAN 2020 calls for reorienting agricultural policy away from its traditional focus on staples, such as rice and wheat, and toward enhancing the productivity and supply of coarse cereals, pulses, fruits, vegetables, and livestock products.

The report is the inaugural issue in a series produced by TCI. Each report will provide periodic assessments of the food, agriculture, and nutrition situation in India.