Panic movement of migrant labour must not be encouraged: Ramesh Chand

Food prices in real terms will rise significantly this year helping growers, says NITI Aayog member Ramesh Chand

The government is optimistic that agriculture will bail out the Indian economy in 2020-21 from the Covid-19 crisis. NITI Aayog member Ramesh Chand explains to Sanjeeb Mukherjee the reasons behind the same and also why panic movement of migrants must not be encouraged at a time when the economy is poised for a pick up. Edited excerpts
 

You recently said that agriculture may be the sole bright spot for the Indian economy in 2020-21 and might clock a growth rate of 3 per cent and even more. What makes you so confident and what are the factors on which you have based your assumptions?
 

At this early stage the agriculture outlook for the year 2020-21 can be based on three or four factors. One, forecast about monsoon, two, water levels in reservoirs, terms of trade for agriculture and an estimate of the area and input for the current quarter (April-June).
 

According to IMD, India is expected to receive normal monsoon in 2020. Empirical data shows that in two-thirds of the cases when monsoon is normal, growth rate of agriculture remained more than three per cent that year. The undercurrent indicates that real prices of food commodities this year are set to increase significantly. The area under summer crops, which are counted in output of first quarter, is 38 per cent higher than the last year's.

Despite the lockdown in the country, fertilizer offtake in the month of April 2020 is 49 per cent higher than the same month last year. Based on all these factors, I expect the agriculture sector to follow the long term growth of the sector, which is around 3 per cent.   

The livestock sector, which contributes a significant chunk of growth in agriculture and allied activities, has been hit very strongly by the Covid-19 lockdown. How do you think this sector will perform in the days to come?
 

The crop sector continues to dominate agriculture and allied sectors. Its contribution to GVA (gross value added) is a little more than double the contribution of livestock, which includes dairy, poultry, meat, wool, piggery etc. Poultry demand and prices have picked up sharply in the month of April and the activity is expected to show recovery this year. Milk prices suffered the effect for a few days in the beginning of the lockdown, but then turned normal in the month of April.

 

Aren’t you being too optimistic with the predictions at a time when, farmers are throwing away their produce due to a lack of demand and prices have crashed?
 

Some perishable fruits could not be sold by farmers due to problems in labour, transportation or marketing. Such cases are isolated and covered only a tiny fraction of total output. At aggregate level such loss will be covered by higher output. About 80% GVA of agriculture is realised in the main Rabi and Kharif seasons -- June to March. If the situation turns normal in the next quarter, agriculture can be safely expected to move on a long-term growth trend. 
 

How will farmers’ income perform in 2020-21, assuming growth is at par with your prediction of 3 per cent in 2020-21?
 

Farmers' income matters at current prices. Therefore, if GVA increases 3 per cent at constant prices, farmers’ income can be expected to rise at a much higher rate depending upon the increase in agricultural price relative to non-agricultural prices. While there is a fear of deflation in overall prices, the trend in agricultural prices is expected to be opposite.
 

What is your outlook for kharif sowing at a time when farmers are complaining of poor seed availability and difficulty in accessing other inputs?
 

There is still sufficient time to arrange seeds, fertilizers and other inputs for the Kharif season. Past experience shows that a major determinant of Kharif sowing is the behaviour of monsoon like date of arrival, distribution etc.   

With a lot of labour migrating to rural India due to Covid-19, what according to you should be our strategy to provide them employment in the coming days?
 

The states should make the highest use of MNREGA resources to give employment to needy workers. I feel we should not encourage panic movement of migrant workers to their native places except in genuine cases. Economic activity must pick up and it will pick up soon throughout the country. It will incur costs and in many cases loss of opportunity to rush to native places en masse. 

What strategies should states adopt to ensure that kharif sowing and harvest go unhindered?

Paddy is the most important crop of Kharif season. Its transplanting in many states depends upon the availability of migrant labour. Thus interstate mobility of labour will affect crop pattern.

Agriculture supply chains have been disrupted during this crisis, what should be our strategy to mend them and also ensure that in future such disruptions don't hit us hard?
 

According to my assessment, agriculture supply chain suffered some disruption in the first few days of the lockdown. As the instructions for exemption to agriculture reached ground staff the supply chain improved. The lockdown period is providing experience to the state machinery on how to ensure smooth functioning of important economic sectors during periods of restrictions. 
 

Accessibility of food, particularly for the lower strata of the society, has been a big problem, particularly when government godowns are brimming with cereals. What according to you is the problem? Where did we go wrong and what should be done in future to ensure that ration reaches all?
 

PDS is run by states and its delivery has improved a lot in recent years. With the free supply of additional quantity of wheat/rice for three months announced under PM Garib Kalyan Yojana, PDS will serve 80% demand for cereals of PDS beneficiary households in April-June. This is quite substantial.
 

There is an issue of serving PDS supply to migrant workers. Some of such workers leave their families at their native place and they avail the PDS facility there. Some move along with their families and stay at one place for a longer period. They can get their ration cards madeat such places. The real problem is with those who keep moving from one place to another depending on the nature and availability of work. Ministry of PDS is working on Aadhar seeding of PDS beneficiaries and universalization so that PDS foodgrains can be supplied at the current place of work of a migrant worker. This involves a lot of coordination between the states and Centre.    

The Covid-19 crisis has thrown up a lot of challenges. What according to you are the lessons that this crisis has taught us and what should be the strategy for the farm sector going forward?
 

The short term strategy to cope with the gigantic shock of Covid-19 and to sustain food security requires: (i) putting in place a mechanism to monitor the ground level situation in rural and urban areas (ii) allowing special treatment to the food sector through a relaxation in restrictions (iii) clear instructions to ground staff to comply with relaxations and lockdown norms (iv) ensuring a close coordination between central and state level functionaries and (v) providing advisories to farmers from time to time (vi) maintaining and raising allocation under the food safety net during the period of crisis. The long term strategy should be aimed at improving the resilience of the agriculture sector and boosting self-reliance in pulses and edible oil.
 

I feel this is the best opportunity for states to undertake long pending agricultural reforms by liberalising agri marketing, contract farming and land leasing.
 

Rural India seems to relatively untouched by the Covid-19 crisis, What could be the reasons for the same and what should be done so that it remains so?
 

There are Covid-19 cases in rural India, but the incidence is far lower than urban India. The main reason is population density and more open space to undertake economic activity while maintaining social distancing. Human contact in the daily chores of activity is also much lower in rural areas. We need to be more liberal with economic activities in rural areas, but emphasize social distancing, sanitization and use of masks. There is a serious risk of spread of Covid-19 cases in rural India with large scale movement of migrant workers and their families, particularly from Covid-19 hot spots. Therefore, we also need a strategy in urban areas to give back work as soon as possible to prevent migrant workers from moving to rural areas.