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Why government is not releasing national Food Security Plan and Implementable Agriculture Policy?

We have seen many good initiatives in all sectors and radical steps like demonetization in last one year. Budget also made lot of good announcements to please citizens after the shock of demonetization and before GST, which will very likely increase tax components of various services and products. One sector which is adding suffering to common man is food inflation, there is no mention of that in economic survey is about food security status of India. This year’s economic survey does not even mention about the progress made between last year and this year on various issues raised in last year’s economic survey.

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Ground reality about India’s food security:

To meet the demand of food for the growing population, India will need at least 20 million tons of additional food every year to meet the minimum nutritional requirements of the citizens. As of today, we are way short of these targets and this is reflected in rising food prices in the market. Today India is having acute shortage of edible oil, pulse, feed materials and fodder. This shortage is ranging from 30% to 60% of the actual requirement by the country. Food import bill has gone up by Rs. 19,000 crores in last one year and food exports are down by Rs. 20,000 Crores in last one year and food wastage is in the range of about Rs. 80,000 crores. There is no mention of these hard facts in economic survey. There is deliberate policy attempt to curb the exports by increase customs duty and putting stock limits on essential commodities to control the food process for the consumers at the cost of price realization by the farmers. This clearly says that our domestic supplies are not able to catch up with growing demand. Rising prices of sugar, wheat, pulses, vegetables, milk, honey, fruits, meat and egg are sending strong signals that somewhere agriculture sector is not delivering. At the same time government is not able ensure minimum support price to the farmers which was promised in election manifestos. The proposed MSP rates are much below than even Consumer Price Inflation Index (CPI), forcing farmers to poverty.

According to Economic Survey 2015-16, page 69 says, the central challenge of Indian agriculture is low productivity, evident in modest average yields, First, consider the main food grains – wheat and rice. These two cereals are grown on the most fertile and irrigated areas in the country. One caveat while comparing paddy yields is that varieties are not exactly homogenous. Also the differences between varieties are large. they use a large part of the resources that the government channels to agriculture, whether water, fertilizer, power, credit or procurement under the MSP program. Even then, average yields of wheat and rice in India are much below that of China’s – 46 per cent below in the case of rice and 39 per cent in the case of wheat. There is no mention in economic survey what was the progress last year and budget is silent what is planned to address this challenge because irrigation level in Punjab is already 99% of the cropping area, fertilizer is available to them, then why productivity is going down? 

What does this mean for Farm Incomes?

According to Economic Survey 201-16, page 73, The negative consequences of low agriculture yields extend from precarious incomes of farmers to large tracts of land locked in low value agriculture, despite growing demands for high value products such as fruits, vegetables, livestock products because of consumption diversification with rising incomes and urbanization. According to NSS data, the average annual income of the median farmer net of production costs from cultivation is less than INR 20,000 in 17 states. This includes produce that farmers did not sell (presumably used for self-consumption) valued at local market prices. Given high wedges between retail and farm gate price, this might underestimate income but it is still low. Moreover, the variance in agriculture income between the more and less productive states is also very stark. There is no mention in economic survey and in budget what government is thinking to address this challenge. 

According to Economic Survey 2015-16, page 76, The absence of MSP procurement for most crops in most states implies either that farmers are selling their products to private intermediaries above the MSP or the converse, i.e., farmers have little option but to sell their produce at prices below the MSP, resulting in a regional bias in farm incomes. There is a general sense that the latter is a more prevalent phenomenon, highlighting the need for reorienting agriculture price policies, such that MSPs are matched by public procurement efforts towards crops that better reflect the country’s natural resource scarcities. There is no mentioned of public procurement plan for crops other than pulses, wheat and rice. There is no mentioned of oilseeds which are vital to address the acute shortage for milk production, livestock productivity and edible oil imports. 

Allocation for in budget to address challenges mentioned above:

Our total allocation for Agriculture and Farmers’ welfare is Rs. 35,984 crore. Special focus has been given to ensure adequate and timely flow of credit to the farmers. Against the target of `8.5 lakh crore in 2015-16, the target for agricultural credit in 2016-17 will be an all-time high of Rs. 9 lakh crore and this year target is about Rs. 10 lakh crores. To reduce the burden of loan repayment on farmers, a provision of Rs.15,000 crore has been made in the BE 2016-17 towards interest subvention and same is extended this year as well. Government has also approved Prime Minister Fasal Bima Yojana and provided a sum of Rs. 5,500 crore in the Budget 2016-17, extended the same this year. 

Where are the results to address the food security?

End of the day dependency on imports are going up, exports are going down, yields are stagnant in most of the crops, cost of cultivation is going up, farmers are not even getting the minimum support price for commodities and at the same time trade distorting policies like stock limits, discouragement for exports like minimum export price higher than world market prices. These steps are to keep the urban middle class as consumers happy at the cost of farmers and discouraging private investment away from agriculture sectors.

According to the “Budget 2016-17’ speech of Finance Minister, we are grateful to our farmers for being the backbone of the country’s food security. We need to think beyond ‘food security’ and give back to our farmers a sense of ‘income security’. Government will, therefore, reorient its interventions in the farm and non-farm sectors to double the income of the farmers by 2022. There is no mentioned what are the farmers’ income targets for 2019 before next general elections. 

There may be a surgical plan for food security of India, but can we implement the same by keeping it secret from the farmers, consumers and state governments in India, where agriculture is the state subject?

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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Vijay Sardana

Vijay Sardana is well known and experience corporate manager, speaker, writer, author, blogger, corporate trainer, well known TV panelist on economic policy, bio-economy, on issues impacting global and national trade and rural economy including food, agriculture and consumer issues, and business advisor on subjects related to economic policies, research and innovation management, consumers and business risk management, consumer-agri-food products and value chain development

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