NEW DELHI, Dec 31:
Living up to its traditional image of being a land of farmers, India has achieved a record production for a number of crops including wheat, rice, pulses and cotton in 2014, but agriculture sector may not be able to repeat this performance in new year due to poor monsoon.
While output may fall for foodgrains and some other crops, there are also fears that prices of farm items could decline in 2015 on global cues and affect farmers’ income.
Agri-experts feel that Government may have to regularly intervene during next year for protecting farmers’ interest as it has recently done by raising the import duties on both crude and refined edible oils by 5 per cent each.
As far as 2014 is concerned, it was a mixed year for the agriculture sector, on which more than 50 per cent of the population is dependent although it contributes only 14 per cent to the country’s GDP.
While the first half of the year brought cheers with an all-time high foodgrains production at over 264 million tonnes and record output of cotton and sugarcane, the second half saw drought-like situation in some parts of the country, posing a big challenge for the new Government.
Food prices were high in the first half of 2014, but it cooled thereafter, so much so that food inflation came down to 0.63 per cent in November from nearly 9 per cent in January.
Immediately after taking charge in late May, the Centre swung into action and announced several measures to tackle the drought-like-situation and contain price rise in vegetable items including the politically-sensitive onions.
Contingency plans were prepared well-in-advance for 500-odd districts and effectively implemented, while diesel subsidy was announced to help farmers save standing crops.
On price-front, minimum export price was imposed on onions and potatoes to boost domestic supply and States were asked to take stern action against hoarder.
That apart, Government in this year’s budget, presented in July, announced various programmes with an outlay of about Rs 7,500 crore to improve irrigation, soil health and research activities besides raising farm credit disbursement target to Rs 8,00,000 crore for this fiscal.
Although monsoon was not as bad as initially feared, still the Agriculture Ministry projected a drop of almost 9 million tonnes in Kharif foodgrains production while sowing areas of rabi crops fell compared with the last year.
On crop outlook, Agriculture Commissioner J S Sandhu said: “Looking at the acreage so far, there is less probability of achieving foodgrains production of 2013-14 record level.”
Noted farm economist Ashok Gulati said: “We cannot go to the previous peaks. But agriculture is not about foodgrains alone. I am not worried about foodgrains as we have so much stock that we don’t know where to keep.”
He noted that falling commodity prices is a big challenge and the Government needs to think how best farmers can be compensated.
Echoing similar views, ICAR Deputy Director General (Agriculture Education) Ramesh Chand said: “I feel low agri-prices are going against agri-growth. The undercurrents are that these prices are not going to increase. In that sense, 2015 may also not be a good year.”
For instance, global rice prices have fallen from USD 525 per tonne in 2012 to USD 423 per tonne, while wheat rates have declined from USD 313 to USD 258 per tonnes, he said, adding that similar trends are seen in other commodities as well.
Falling commodities prices do not augur well as India, of late, has become a major exporter of rice, wheat and cotton. A decline in exports would hamper farmers’ interest who are already under distress and have been committing suicide.
Even during this year, the Government had to intervene on several occasions for protecting the farmers’ income.
With accumulating huge arrears to sugarcane farmers, an interest-free loans of Rs 6,600 crore and export subsidy were provided to sugar mills to make cane payment.
Import duty on sugar was also raised to 25 per cent from 15 per cent, still the cane arrears are estimated to be around Rs 4,000 crore by end of this year.
Fall in domestic cotton prices to even below the support price (MSP) in major producing states forced the Centre to procure cotton to prevent distress sale.
In case of edible oils, import duties were hiked twice this year. Duty on refined edible oils was first hiked in January by 2.5 per cent. At the fag end of the year, duties on both crude and refined oils were raised by 5 per cent each.
As balancing the interests of farmers and consumers was becoming a difficult task, the Centre announced long-term measures to boost farm productivity and improve efficiency of subsidy programmes.
For example — A Rs 1,000 crore ‘Pradhan Mantri Gramin Krishi Sinchai Yojana’ was announced to boost irrigation in rural areas, while a new agri-insurance scheme for farmers was also promised to protect them from vagaries of monsoon.
To insulate consumers from food inflation, an amount of Rs 500 crore was set aside for price stabilisation fund.
Moreover, a panel was set up to recommend ways to restructure the Food Corporation Of India (FCI) so that the entire process of procurement of wheat and rice from farmers and then distributing grains to poor could be made effective.
As through the year, there was not much progress in the implementation of National Food Security Law passed last year, the Centre had to extend the deadline twice.
It had to issue stern warning to as many as 25 states/UTs to implement food law from April next year, else allocations for APL families under old system would be stopped.
Only 11 states/UTs have so far implemented the food law, under which 5kgs of foodgrains will be supplied per person per month at Rs 2-3 per kg to country’s two-third of population.
In 2015, the Centre would have to push states to implement food law and also restructure FCI based on the expert panel report, to be submitted early next year.
On the other hand, it would have to keep a close watch on falling global commodity prices and consequent adverse impact on Indian farmers. (PTI)
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