Everyone knows how much food prices have risen in the last few years. Not everyone, however, knows how much costs have spiralled for those who produce the food you and I eat.
Data on daily wage rates for agricultural operations, compiled by the Labour Bureau at Shimla, show huge increases to have taken place in most States during 2009 and 2010.
Andhra Pradesh, for instance, has seen farm wage rates – the average taken for ploughing, sowing, weeding, transplanting and harvesting operations – going up 40.3 per cent in 2009 and 27.8 per cent in 2010.
It is no different in other States, where, in the last year alone, the price of agricultural labour surged 15 to 20 per cent in Haryana, Bihar, West Bengal and Assam, 32 per cent in Punjab, and 43 per cent in Orissa.
MSP policy implications
“The Labour Bureau figures are an eye-opener, though they conform to what farmers themselves say. And if you add soaring energy costs as well, protecting the margins of farmers becomes a real challenge,” noted Dr Ashok Gulati, Chairman of the Commission for Agricultural Costs and Prices, which advises the Centre on fixing minimum support prices (MSP) for various crops.
The Labour Bureau's data, compiled on a monthly basis, are based on primary information collected from 600 sample villages over 20 States. They cover wage payments both in cash as well as kind, with the latter valued at the prevailing local retail prices.
Dr Gulati admitted that incorporating the entire increases in labour and energy costs in official MSP computations is not easy, “more so in a scenario of already high food inflation”.
Tweaking NREGA
According to him, the time has come to re-orient schemes such as the National Rural Employment Guarantee Act (NREGA), where “you get Rs 125 or so for two-three work”. That makes a scheme with 70-80 per cent welfare and 20-30 per cent productive component.
There is a case to extend NREGA to work on private farms.
“Why cannot we have a system, where rural labourers are paid Rs 250 for working eight hours on farmers' fields? Out of the Rs 250, Rs 125 can be underwritten by NREGA, with the balance coming from farmers. We are, then, able to dovetail welfare schemes with productive activity and raise the latter component to 70-80 per cent,” Dr Gulati added.