At the receiving end of much criticism for the current aggravating agricultural distress — especially centring around issues such as low MSPs and import duties — the ruling BJP’s first line of defence has been the announcement of incremental measures such as a farm loan waiver in Maharashtra. But, according to Commerce Minister Nirmala Sitharaman, the Centre has been proactive in addressing farmers’ issues by taking various short- and long-term measures. Violent agitations in a State like Madhya Pradesh, which has seen a spurt in agriculture under the BJP, are clear evidence of opportunistic politics driving the Opposition to incite farmers, she said in an interview to BusinessLine . Excerpts:

The BJP is being attacked not just by the Opposition but even by some of your allies for your policy towards import — the slashing of import duty on wheat in a year of bumper crop is a case in point. What do you have to say?

The duty on wheat import has always been around 25 per cent. It was not until September 2016 that it was brought down to 10 per cent and I would like to underline the factors that went into that decision. It wouldn’t be hard to recall that 2015-16 was a drought year. The output had fallen sharply and there were serious concerns about availability. The impact of the drought year was being felt until early 2017.

Then, in January 2017, we started assessing agricultural output and these discussions led to a decision in March to increase the import duty on wheat to 10 per cent again.

What is lost in the din created for political purposes is that from a drought year to a bumper crop year, the duties were slashed and raised accordingly. Then there are other considerations, such as the demand from southern States, who have been consistently arguing that importing wheat is less expensive than transporting it from Punjab.

The wheat products industry requires a certain gluten and protein content in wheat which is not sufficiently contained in our crop. In any case, the quantum of wheat imported is not enough to impact prices.

All these arguments went into the decision regarding import duties.

Still, the assessment with regard to crop yields could have been made in September 2016, just after the monsoon, when you decided to the slash import duty for the first time...

I would urge you to place these arguments in perspective. Let us look at the quantum we produce. The average trend in wheat production is 82-83 million tonnes. There are industry estimates and other institutional figures but the general consensus is that wheat production in India does not cross 85 million tonnes even in an exceptional year.

The reality is that we do not have real time data on wheat growing area. At any given time, we are going by estimates.

Now, the FCI procures wheat and the MSP is fixed in advance through a layered and considered process. You need to understand that the MSP is fixed well in advance of sowing so that the farmer knows the price of his crop before he plants it.

Please consider the fact that 2015-16 was a drought year and the MSP was fixed in advance. Additionally, the FCI procured 25 million tonnes of wheat.

There are two purposes the FCI serves through procurement — it fixes the MSP and disburses the grain to the States for distribution under the PDS programme which has a subsidy element.

In a drought year, when the FCI procures 25 million tonnes of wheat, there are market considerations too for bringing down the import duty because there are concerns about availability of wheat in the market.

Then, in 2016-17, when we expect a bumper crop, we have already increased the import duty and the FCI has increased the quantum of wheat procured to about 30 million tonnes.

It covers more farmers under the MSP, private godowns have been enlisted and MSP too has been increased. On the government’s part, reactive steps have been taken, there have been institutional interventions.

Clearly it is not enough. The farmers are angry that in a bumper crop year, they are having to sell in distress and the price of every agricultural produce has fallen. The PM asked the farmer to sow pulses and even those are being imported.

No one is denying that we need to address issues and bring about long-term solutions such as increasing storage/warehousing facilities and introducing more scientific methods of storage. The government is conscious of these concerns.

But even in a developed country, the hard economic reality is that no institutional response would be adequate to address a drought-to-bumper-crop situation within a span of eight months.

No institutional response can satisfy the expectation of the grower.

So far as pulses are concerned, our yearly production has been 16-17 million tonnes and we consume over 23 million tonnes. We have never produced more than 17 million tonnes.

Of course we import and are concerned about the price of pulses in the market. This was the reason to boost pulse production, giving incentives and bonuses, increasing cultivation in Maharashtra and Telangana, and so on.

But you must understand that we negotiate imports with countries such as Canada who grow pulses purely for export to India. Again, in the absence of real time data on exact production figures, even when we would reduce import, it can’t be done away with entirely at one go.

But Madam, we are witnessing angry protests in areas even in Madhya Pradesh…

It is extremely distressing that even in an exemplary State like Madhya Pradesh, where the Chief Minister has personally crafted the agriculture growth story, we are witnessing agitations.

I am not saying it because I am from the BJP but the fact is that Shivraj Singh Chouhan has given such close attention to agriculture output and procurement that what is happening in MP cannot be anything but political.

There is evidence that the Opposition is exploiting the farmers for narrow political gains.

Related Topics