Despite bumper harvests the agrarian prices are falling, this is aggravating agrarian distress.
It is a pointer to institutional failure in addressing farmers’ issues.
What are the reasons behind falling prices?
The impact of demonetisation has disrupted the supply chains and contributed to traders not holding stocks at their normal levels.
The surge in imports of pulses and oilseeds, which only added to a bumper crop last year, aggravated the supply glut.
Sluggish global prices of soyabean and maize contributed to domestic prices falling well below MSP.
Export curbs on pulses, lifted recently (besides stocking limits) made matters worse.
Due to absence of higher public investment in the rural economy Support prices, price deficiency payments and higher credit are not working.
Why higher outputs are not favourable to farmers?
It is significant that higher output has generally had no role to play in the case of Kharif crops this season.
Kharif foodgrain output in 2016 was 138 million tonnes, it is estimated at 134 million tonnes this time.
Kharif oilseeds output is estimated at 20.6 million tonnes this year, against 22.4 million tonnes in 2016.
The effects of export curbs and higher imports to control consumer inflation in pulses in early and mid-2016, are being felt by farmers now.
What needs to be done?
The Government should make sustained efforts to raise output,by providing price incentives, extension services and technology.
Public investment for developing a diverse food processing ability and marketing infrastructure is needed.
Centre and States should take steps to honour support prices by stepping up procurement.
Implementing the Pradhan Mantri Fasal Bima Yojana in the eastern region where the excess rain is likely to impact the standing paddy crop will somewhat address the issues.
The focus must be on improving output and yields should be accompanied by reliable price discovery.
