NREGS is introduced with the avowed objective of providing 100 days employment to rural work force during the periods when no agriculture work is available. It was never envisaged that agriculture should be deprived of labour when it is needed especially during sowing and harvesting periods. But the unintended situations have arisen where labour shortage is felt in states like Punjab and Haryana during paddy sowing season. Farmers were forced to pay double the rates prevailing during the previous season thus increasing cost of cultivation. One reason for increase in prices of agri commodities is the rising cost of village labour that the urban consumers find tough to factor in. It's also fashionable to blame the serial rise in minimum support prices for higher food prices. Yet, has anyone spotted a farmer fattening on just the MSP, without additional advantages of soil, technology, credit and market access. A high MSP is no guarantee of farm profits. It's an incentive, like the variable part of your salary. That's all. Moreover, when yields are stagnant and input costs climbing, raising MSP is a necessary choice. India can't afford to let go of the few supply certainties it has in the hope that international markets will provide.

NREGS pay off : Many commentators feel that the UPA’s impressive performance was mainly due to NREGS. It had its downside as well, as with any state-run scheme. Some say the ruling party in the State to give employment on paper to the party functionaries misused it. Second, agricultural labourers detested hard work in the fields and settled for the comfort of dole, which is what the employment guarantee scheme in some pockets turned out to be. BL010609

Business Standard survey of NREGP sites in five states — Gujarat, Orissa, M P, W B and Chhattisgarh.A look at the way agricultural wages have gone up since 2005-06 in some of the states makes it clear that NREGP has made agriculture more expensive for farmers and more paying for workers.

In Gujarat, agricultural wages, which were Rs 50 a day in 2005-06, doubled last year. In Madhya Pradesh, farm wages went up from Rs 58 in 2005-06 to Rs 67 the following year and Rs 85 in 2007-08. It is Rs 91 now — a compounded annual growth rate of 15.78 per cent. In Orissa, it went up from Rs 55 in 2005 to Rs 70 in 2008. It is set to increase to Rs 90 this year. That would be a CAGR increase of over 17 per cent over three years. In Kerala minimum agri wages are increased from Rs125 to Rs160. A P recommended increase in NREGS wages to Rs 125.

According to Rajakutty, director, National Institute of Rural Development (NIRD), higher wages for NREGP are definitely bad news for agriculture. He quotes an NIRD study that found that even the existing NREGP wages have led to agricultural wages shooting up 20 per cent in the states they surveyed. BS 210709

Farmers here wait at railway stations for trains from these two states, as the premier bread basket state stares at a massive labour shortage ahead of the paddy sowing and transplantation season.  The transplantation — an intensive process that requires extra 7,00,000 labourers over and above the domestic supply — should ideally begin in the first week of June, but the labour tap is now down to a trickle after overflowing in previous years. The reasons are many, but chief among them is the National Rural Employment Guarantee Scheme — that has helped many labourers find work closer to their villages. Farmers are offering to double the wages for these unskilled labourers. Also on offer are blandishments such as water coolers and free food. “The labourers usually come in groups with one leader who is given Rs 3,700- 4,000 per hectare. Over and above, the farmer provides labourers tea, even milk, liquor and food depending on the lifestyle and capability of the farmer.” Many marginal farmers rather than hunting for labourers, have preferred to either sell their land or give it on annual contracts. With nearly three quarters of Punjab’s farmers having land holdings of less than two hectares, mechanisation may not be an optimum solution.  Punjab, the single-largest contributor to the Central pool of wheat and paddy, is considered the food bowl of India. “In 2008-09, Punjab’s contribution of wheat stood at 44%, and rice 31%. ET150509
In order to avoid the situation of unavailability of labour for vital farming activities, it is suggested that there should be a convergence between agricultural activities and NREGS.

In states like Tamil Nadu, labour shortage is felt while harvesting sugarcane thus affecting both farmers and millers. Sugarcane farmers now pay Rs 250-350 a tonne for harvesting compared with about Rs 100 a couple of years back. Last year, the sugar mills paid Rs 1,100 a tonne for sugarcane, and this year, they have increased the sugarcane price to over Rs 1,220 a tonne and the increase has primarily been absorbed by the increasing labour costs. Sugar cane producing states are facing the problem as other industries have weaned away the labour force.
The National Rural Employment Guarantee Scheme has become a preferred choice, according to SISMA. Sugarcane harvesting is a gruelling work that labourers prefer to avoid. In Kerala paddy hay is burnt in the fields as no labour is available . In A P cotton is left unpicked due to scarcity of labour. And yet AP government recommended to the centre increase in wages by more than 50%, fro Rs 80 per day toRs 125 per day unmindful of cascading effect it will have in escalating cost of cultivation of crops by way of over 50% increase in agri labour wages.

‘In the name of implementation of the National Rural Employment Guarantee Scheme, what is actually happening is virtual looting of public money’: according to Mr Yashwant Sinha, BJP leader and former Union Finance Minister. “I can say from my experience that a section of corrupt politicians, bureaucrats and contractors are dividing among themselves a large chunk of the funds allocated under the scheme. BL 130709

As many as 15 pulse mills in Kanpur have shut shop as workers have found the National Rural Employment Guarantee Scheme (NREGS) better than sweating it out at such units. Millers say people are reluctant to work in such units despite being offered as much as Rs 200 a day as wages. On top of that, scarcity of power and raw materials has added to their woes." The closure of pulse mills in Kanpur is triggered by the shortage of labour and the NREGS has created this problem. Already, 15 mills have shut shop while many more are on the verge of closure," "Why should a labourer go to work in such mills, situated far away from his home, when he can get Rs 100 a day working near his own house under the NREGS?" PTI 160709