Amid growing clamour over farm distress from different parts of the country, the government’s price-support measures that aims to boost agri income may not turn out a sustainable solution. Terming it a ‘dole’ model, noted agriculturist Ashok Gulati underlined the need to boost investment for value-addition, agriculture research and processing and adopt a ‘development’ model instead.

The former Chairman of the Commission for Agricultural Costs and Prices (CACP) projected a mere 2-2.5 per cent agriculture growth for 2017-18, far less than the 10 per cent desired to achieve PM Narendra Modi’s aim of doubling farmers’ income by 2022 amid lack of attention towards strengthening agri infrastructure.

“The existing real income of the farmers are growing at the rate of 3.6 per cent per annum, which is required to grow at 10.4 per cent to double farmers’ income. Providing subsidies, loan waivers and cost-plus MSP rates isn’t a sustainable solution as that will put excessive financial burden on the government. Even if the nominal income has increased, the real income growth remains sluggish, resulting into a primary reason for farm distress,” said Gulati on the sidelines of the Global Castor Conference 2018 in Ahmedabad.

Reduce supply chain

Gulati underlined the need to cut supply chain and create a direct linkage between farmers and the market through reform measures. “There were expectations of reforms from the NDA government. But in the past four years, the agriculture GDP growth fell to average 1.9 per cent even below the 10-year average of 3.7 per cent under previous UPA rule,” he said.

The price support mechanisms including the cost-plus MSP model, proposed in the Budget and other experiments such as price difference scheme — Bhavantar Bhugtan scheme by Madhya Pradesh — have threat areas for being ‘dole’ model and proves against the long-term interest of the farmers, besides being detrimental to the State finances.

“Bhavantar scheme struck a double blow. Market prices fell by 40 per cent from MSP and only 32 per cent urad was sold through this mode. Under such schemes, the government loses big money and uncontrolled cartelisation pulls down the prices,” Gulati said.

Dump consumer bias

In order to protect consumers’ interest by way of food subsidies, the government is choking the farmers by capping the prices of agri-produces. Gulati underlined the contradiction in the farm produce pricing saying, “there is a need to dump consumer bias from the agriculture pricing mechanism and divert a part of food subsidy to value-addition and processing.”

The investment towards agricultural research and technology still lags behind. According to Gulati, going forward, India would need more allocation for agricultural research than for the subsidies.

E-NAM, a damp squib

Commenting on the e-National Agriculture Market (eNAM), Gulati stated that before the ambitious market-integration scheme could succeed, several gap areas emerged. Gulati expressed a need for standardisation in agri-produces. “In absence of robust monitoring mechanism for assaying, grading, sorting, delivery, quality check and dispute settlement mechanism, the eNAM model can’t become meaningful,” he said.

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