Gujarat farmers unlikely to benefit from sops doled out by State govt

Ahead of the Assembly elections, the Gujarat government has announced a slew of measures to woo rural voters. This includes waiver of GST on equipment used in micro-irrigation, 0 interest on loans up to ₹3 lakh for farmers, and a bonus of ₹500 per quintal on cotton.

But these sops are not likely to make farmers in the State happy.

The average growth in Gujarat’s agri-GDP between 2002-03 and 2013-14, when Narendra Modi was the Chief Minister, was 8 per cent. In this period, all-India growth was about 3.3 per cent. But, growth has since declined in Gujarat. In 2014-15, its agri-GDP shrank by 1 per cent and there was not much improvement in 2015-16 either.

As per the Centre’s Agricultural Statistics report, 2016, farmers’ income in Gujarat, at ₹7,926, is much lower than that of their counterparts in Punjab (₹18,059), Haryana (₹14,434) or Kerala (₹11,888).

As of January 5, 2017, only one-fourth of the farmers in the State were insured under the Pradhan Mantri Fasal Bima Yojana. Of the 11.9 lakh farmers with crop insurance, 11.89 lakh were farmers with a bank loan.

The deficient monsoon in 2014-15 and 2015-16 intensified problems. In 2016-17, there were good rains, but a bumper harvest in groundnut and other crops made prices plunge.

The interest waiver on loans is only short-term relief. With over 60 per cent being small and marginal farmers, informal channels still play a large role in credit.

The State bankers’ committee report shows that against the RBI’s target of 8 per cent credit for small and marginal farmers, Gujarat’s farmers in this category got only 5.44 per cent as of September 2016. The large section of farmers who are dependent on non-institutional channels for credit, will get no relief from the interest waiver.

The bonus over and above the Centre-announced MSP in cotton is a good move but not many are likely to benefit.

An official from the Gujarat agriculture department told BusinessLine that from one hectare, 15.75 quintals of cotton will be procured at the higher State announced price.

But farmers are sceptical about Cotton Corporation of India (CCI) procurement. According to Hari Bhai Patel, a cotton farmer from Banaskantha district: “CCI procurement has not started yet. I prefer giving the produce to the commission agent in my place as it is hassle free. At the CCI centre, there is a long queue. Also, they come only when the government gives them a quota…”

Farmers in Banaskantha, Patan, Surendranagar, Morbi and Jamnagar districts, which were the worst hit by the floods in July, are also not going to benefit as they have suffered crop losses.

Says Ishwar Bhai Patel, 59, from Palanpur, who has 22 hectares on which he sows castor seed, groundnut and kapas: “We had to re-sow seeds two times and the crop yield could also be lower than expected…the bonus on the MSP for cotton is good, but farmers in my district will not benefit….”

“The biggest worry for farmers here is there is no information about price. Also, the cost of transporting our produce to the mandi is high; the nearest APMC (Agriculture Produce Market Committee) is 10 km away,” says Prabhat Ramjibhai Patel, 50, a farmer from Anjar Taluka, Kutch district. “The government announces MSP in cotton, but there is hardly any procurement. Unless the farmer is ensured a good price, he will continue to be in distress…,” he adds.

The Centre’s eNAM initiative, originally conceived to give pricing power to farmers, is still in the initial stages of implementation on Modi’s home ground itself. Of the 200-plus APMCs, 40 have been connected with the platform.