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Sreelatha Menon: Farmers' pie

The Budget ignores farmers' plight of penury amid abundance

Sreelatha Menon  |  New Delhi 

The second green revolution found a mention in the Union Budget as a big achievement for the government. But, while paddy production went up manifold in eastern India, did it help its producers? In Finance Minister Pranab Mukherjee’s home state of West Bengal, there was agony everywhere in the last few months, as paddy and potatoes were selling cheap and pauperised cultivators were killing themselves.

The government was nowhere to procure the unsold food grains or vegetables.

Ashok Gulati, chairman of the Committee of Agriculture Costs and Prices, exhorted the government to buy commodities that were not fetching even the support price. Of course, his advice and recommendations were ignored.

rights’ activists like and say the farmer is ignored while the Budget talks a lot about productivity.

The cost of fertilizers — another concern of the — went unaddressed. In fact, fertilizer subsidies have fallen from Rs 90,000 crore last year to Rs 60,000 crore this year. Subsidies for fertilizers like DAP, whose prices have more than doubled in recent times, have been reduced recently in a Cabinet decision. If you have an occupation that employs 65 per cent of population unprofitable, what kind of inclusive growth are we talking about, asks Jakhar.

But, apart from the core issue of farmers, the Rs 7,000-crore reduction in allocations to the National Rural Employment Guarantee Scheme has also shocked many.

The Budget gives Rs 17,000 crore to agriculture, but takes away Rs 7,000 crore from villages through NREGA, says Jawandhia. He says the service tax increase on mobile phones would be another blow to rural citizens. It is obviously not a Budget for farmers or the poor, he says.

The Budget does promise low-interest loans for farmers. Farmers are to get loans at seven per cent, and on prompt payment, further loans at four per cent.

States are already offering lower rates. Maharashtra, for instance, gives farmers loans of Rs 50,000 at zero interest, and one lakh at two per cent interest. Karnataka gives loans at one per cent interest, while Madhya Pradesh gives at three per cent interest.

But these fail to help the majority of farmers because this excludes defaulters. Farmer groups have been asking to extend the payment term of defaulters to bring them back into the formal banking fold. However, no state has so far done that, leaving farmers at the mercy of grasping money lenders, says Jawandhia. In most states, credit is given on the basis of land rights. Tenancy is unwritten and there is 85 per cent tenancy in Andhra Pradesh, according to Dr G V Ramanjaneyalu, executive director of Centre for Sustainable Agriculture. “None of them are eligible for credit,” he says.

As May approaches, it’s that time of the year when farmers go into depression and take drastic steps, not knowing how to raise funds for the coming kharif crops. The useless heaps of turmeric and ginger would be a worry, even as the government celebrates productivity. Turmeric prices fell last year from Rs 18,000 a quintal to a less than a fourth of that.

The farmers cannot store their produce forever, as they need money to repay loans, and to buy seeds for the kharif crop, says Ramanjaneyalu. Unless policies and allocations address these matters, nothing changes for the farmer.

First Published: Sun, March 18 2012. 00:43 IST