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‘Cultivating cereals unprofitable for farmers’: Report
Cultivating cereals is unprofitable for farmers across most states, according to government data. The startling revelation shows how the dynamics of agriculture has changed, even as political parties fight over a ‘remunerative’ minimum support price for crops like rice.
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The worst return comes from rice cultivation, the largest sown crop across India and under the support-price regime for decades. Data on the net return for—or income earned by—rice farmers presented to Parliament shows they have suffered losses in all the major paddy producing states, except Andhra Pradesh.
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The data for three crop years up to 2006-07 shows that paddy farmers in only eight of the 18 producing states, including Andhra Pradesh, have made consistent profits. These states are Haryana, Karnataka, Punjab, Chhattisgarh, Uttarakhand, Gujarat as well as Himachal Pradesh.
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The impact of these gains were more than offset by the losses made in important paddy growing regions like Assam, Madhya Pradesh, Maharashtra, Orissa, Tamil Nadu, West Bengal and Jharkhand. Farmers made consistent losses in all the three years. Paddy farmers in another three states made losses in two of the three years, while in one state, the loss was confined to a single year.
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The net return for farmers was calculated by deducting the cost of cultivation from the value of the gross product (the cereal and any by-products).
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Though the scenario is a bit more optimistic in the case of wheat, the figures are bad for coarse cereals like jowar and bajra. All these crops fall under the minimum support-price system.
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Paddy farmers who earned the highest net income a hectare in 2006-07 were those in Punjab (Rs 11,754), Gujarat (Rs 9,153), Haryana (Rs 8,978) and Karnataka (Rs 8,360).
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| The steepest losses a hectare of paddy cropped were in Maharashtra (Rs 6,247), Assam (Rs 3,484), Tamil Nadu (Rs 2,091) and Jharkhand (Rs 1,842). |
Wheat Farming
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In wheat, farmers fared better. In eight of the 12 states, viz, Bihar, Gujarat, Haryana, Himachal Pradesh, Madhya Pradesh, Punjab, Rajasthan and Uttar Pradesh, farmers have made consistent profits in all the three years up to 2006-07. The only farmers that made continuous losses were those in Jharkhand and West Bengal. The scenario was better in Chhattisgarh, where wheat farmers made losses for two years, and Uttarakhand, where losses were confined to just one year. |
Wheat farmers who registered the highest net income a hectare were those from Rajasthan (Rs 15,780), Haryana (12,909), Punjab (11,265) and Gujarat (Rs 9,605). In contrast, wheat farmers who had negative income a hectare were those from Jharkhand (Rs 2,592) and West Bengal (Rs 2,444).
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In the case of jowar, of the six states studied, farmers in Rajasthan made consistent profits in all three years. The worst-case scenario was for jowar farmers in Andhra Pradesh, Karnataka and Tamil Nadu, who made consistent losses in all the three years. Jowar farmers in Madhya Pradesh were able to limit their losses to two years and their peers in Maharashtra did better by restricting losses to just one year.
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For bajra, too, the picture is similar. Farmers in Gujarat and Rajasthan made profits in all three years, but in states like Haryana, Karnataka, Maharashtra and Uttar Pradesh, they made consistent losses. FE 261209
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Leakages in irrigation, fertiliser subsidy scheme under CAG lens |
Given that the country’s subsidy bill on fertilisers had gone beyond its defence budget in 2008-09, the Comptroller and Auditor General (CAG) of India has initiated an unprecedented performance audit of the fertiliser subsidy regime. It has also begun an audit of the government’s flagship irrigation scheme—the Accelerated Irrigation Benefit Programme (AIBP)—as part of its efforts to understand leakages in the flow of development funds to the rural economy. |
The rationale behind conducting performance audits in these two sectors is to check whether the benefits of the schemes are reaching their actual beneficiaries—the farmers. “The last few months have seen an unprecedented rise in food prices at the retail level, while the condition of the farmers largely remains the same. Therefore, the CAG wants to know whether these large, expensive programmes are benefiting them—whether they actually receive fertilisers at subsidised rates and what is the progress under the AIGP.” |
The other objective is to ensure that the huge funds provided to these sectors are being fully utilised and not diverted. “With the quantum of funds involved in these two programmes, it is essential that they are audited,” he said. “For instance, in 2008-09 the fertiliser subsidy was almost Rs 1 lakh crore, which is about the same as the budget for two to three states.”
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 The Centre, in the last three years, has spent over Rs 1,50,000 crore on fertiliser subsidy. From Rs 43,319.16 crore in 2007-08, allocations for fertiliser subsidies touched an unprecedented Rs 99,494.71 crore in 2008-09. Till November 2009-10, the Centre has spent Rs 44,270.83 crore on footing this bill. |
Similarly, under the AIBP, a centrally-sponsored scheme of the ministry of water resources, the Centre provides assistance to irrigation projects as an incentive to the states for creating irrigation infrastructure in the country. The scheme has been given huge allocations, such as Rs 20,000 crore with a grant component of Rs 5,500 crore in 2008-09. |
The AIBP was last audited by the CAG in 2004, but the fertiliser subsidy has never been put under the scanner. The audits are expected to be completed by the next month and their findings will be tabled in Parliament in the Budget session, a senior official with the CAG said. FE 261209 |
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