Farmers facing Rs36,000 crore loss, claim unions

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New Delhi: With major crop prices plunging below minimum support prices (MSPs), farmers are likely to lose an estimated Rs35,968 crore in earnings for the kharif season, a coalition of farmers’ organizations said on Thursday.

In the two weeks to 7 November, farmers have incurred a loss of Rs6,283 crore, having sold crops at lower than their support price, the All India Kisan Sangharsh Coordination Committee (AIKSCC), a coalition of over 180 farmer unions, said.

The AIKSCC numbers on loss to farm incomes were arrived at after a comparison of average wholesale prices in mandis (regulated farmer markets) and MSPs announced by the centre. The analysis was done for seven major kharif (summer) crops—paddy, maize, bajra, soybean, groundnut, cotton and urad—by taking into account market arrivals and a weighted average of modal prices in major growing states.

After four droughts, farmers have been hit by three successive seasons of low crop prices, the coalition said in a statement. The estimates, it added, are conservative as the actual prices at which farmers are selling their produce are often lower than official wholesale prices.

The coalition also said, citing data published by the agriculture ministry, that for several crops the government-fixed MSPs are lower than the cost of production as calculated by the Commission for Agricultural Costs and Prices. These include crops like jowar where the support price is 19% lower than the cost of production and pulses like moong for which the MSP is 2% lower than the production cost.

Prime Minister Narendra Modi had promised before the 2014 general election that MSPs will be fixed at 50% above the cost of production. However, of the 14 kharif crops, the MSPs of seven have been fixed lower than the (C2 or comprehensive) cost of production, the coalition said. Assuming an MSP at 50% over costs, farmers will lose an estimated Rs2 trillion going by current mandi prices, the coalition said.

“The government has set a target to double farmer incomes (by 2022), but even after successive years of normal rains their losses are mounting,” said Yogendra Yadav, a farmers’ leader and a member of the coalition. “Our estimate does not take into account losses suffered by growers of horticulture crops like potatoes and onion for which there are no MSPs but farmers are selling at a loss,” Yadav added.

Analysts agreed with the farmers’ analysis.

“The actual losses to farmers may be a little lower on account of government procurement of crops like paddy, but overall the analysis is fair,” said Himanshu, an associate professor at Jawaharlal Nehru University, Delhi, and a Mint columnist. “There is little doubt that crop prices are plunging and that is due to a serious demand deflation in the economy.”

The coalition also unveiled a social media campaign. AIKSCC which has been at the forefront of farmer agitations across several states, also announced a farmers’ protest in Delhi on 20 November with demands for remunerative prices and loan waivers.