Chief economic adviser Arvind Subramanian’s statement that agriculture should be centrestage in the coming Union Budget for 2016-17, with its focus on reviving agriculture in the medium term, should be taken very seriously by Prime Minister Narendra Modi and finance minister Arun Jaitley if agriculture is to increase its presence in GDP. As the CEA stressed, agriculture has in the past two years shown how vulnerable it is to the monsoon’s vagaries and climate change.
This, of course, is nothing new: India has seen drought years regularly with the farmers reduced to penury and indebtedness. One could argue that agriculture should have a separate budget like the Railways, but being made centrestage could be a good beginning. The key is how much money is given to agriculture? While irrigation always gets special mention, it is necessary to focus on non-irrigated farmers and agricultural labour too as 70 per cent of farmers depend on the monsoon.
The most suicides are seen among non-irrigated farmowners and cash crop growers. For a start, the government should treat farm labour and farmers on par with state employees. The minimum wage suggested for government staff by the 7th Pay Commission is Rs 18,000, that comes to roughly Rs 600 per day. For farm workers, the minimum wage is just Rs 90 per day. Why this disparity? The farm labourer, working from sunrise to sunset, should get at least Rs 400 per day. If farm labour costs go up, the minimum support price for farmers’ produce must also rise proportionately.
The government and RBI governor Raguram Rajan must change their mindset about MSP being inflationary while a hike for government employees is incentivisation! In any case, MSP being inflationary is facetious. For instance, when the price of tur is between Rs 180-200 per kg, the MSP for tur was just Rs 4,600 per quintal or Rs 46 per kg. Who benefited from these high prices? Only traders!
The subsidies for agriculture go mainly to fertiliser companies and benefits the irrigated land farmers who use 15 bags of fertiliser for one crop compared to 2-3 bags by rain-fed land farmers. One can only hope that Mr Subramanian and Mr Jaitley will see this revolutionary idea of bringing agriculture to centrestage materialise. They should speak to genuine dryland farmers and not rely only on armchair agricultural experts who don’t understand the complex dynamics of agriculture and the cost of production.
