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WITHOUT SUPPORT, PRICES IN FREE FALL

The paddy crop this year has been the worst in recent history in the three paddy surplus states of Punjab, Haryana and Andhra Pradesh. A good part of the crop was destroyed in the scorching heat, and the monsoons that arrived in September further added to the farmers’ misery. Not surprisingly, the arrival of paddy in the mandis is down to a trickle this season.

Normally, a failed crop leads to an increase in market prices, but not this time. Rather, distress sale of paddy has been reported. Farmers are reportedly emptying stocks in the godowns of middlemen to obtain temporary monetary relief, but the prices they have got are much lower than the minimum support price last year when there was a better harvest.

This year the minimum support price was announced only in September. Last year, the government had started preparations for purchasing paddy in April itself. Also, the minimum support price originally declared was the same as that last year — Rs 530 per quintal — although the price has been increased every year for the last 10 years. Farmers who had expected around Rs 750 a quintal were doubly shocked. In anger many of the farmers took to the streets of Chandigarh.

Many arguments

Both the ruling Congress and the opposition Shiromani Akali Dal-Bharatiya Janata Party combine have been trying to gain political mileage out of this crisis. The chief minister, Amarinder Singh, held a dharna outside the prime minister’s residence and courted arrest, while the SAD leader, P.S. Badal, met Atal Bihari Vajpayee to tell him of the plight of farmers and plead for a more liberal support price. The government has since added Rs 20 to the price, just about the average increase in the price in the last 10 years. The Centre also agreed to consider a bonus for the afflicted farmers.

But the Congress insists on a minimum support price of Rs 666 for common paddy and Rs 726 for grade A paddy, in addition to a bonus of Rs 100 per quintal. Not to be outdone, the SAD is now demanding a package of measures — immediate payment of a bonus of Rs 20 per quintal in addition to the support price, compensation of Rs 5,000 per acre, 4-8 per cent rollback of sales tax on fertilizers and pesticides, postponement of agriculture loan repayments and waiver of interest this year

The Centre’s version is quite different. It claims that because of the political parties’ squabbling over the issue, the demand for a higher minimum support price was voiced quite late and then it did not make sense since it was already loaded with excess food stocks and could not afford to pay such a high price.

Punjab in the lead

Also a higher price would lead farmers to think that they could continue to produce as much paddy as they choose next year. This would never do at a time harsh measures are needed to reduce paddy cultivation, which is becoming increasingly non-productive and non-remunerative. The government has been liberal with the support price of oilseeds, since it wants to divert farmers to its production. The stand-off between the Centre and Punjab on this issue continues.

As for Haryana and Andhra Pradesh, these do not generate as much surplus paddy as Punjab. Also, the initiative on the minimum support price for paddy generally comes from Punjab. Haryana is now turning more to Basmati, which has not been much affected by this year’s drought.

This time, the minimum support price for paddy has assumed more than its usual political overtones because the principal paddy surplus state, Punjab, was controlled by the Congress. Had it been controlled by the SAD-BJP, the issue would have got sorted earlier. But the kisans are also angry with the Congress government for stopping free power and water supply, particularly at a time the state faced a crisis in paddy cultivation.

The lesson here is that both the Centre and states should work in tandem to evolve a suitable strategy for the future of agriculture.

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