Ironically, Modi’s move comes a day after the Congress in its manifesto for the (all) state polls released on Tuesday, Wednesday 17, promised waiver of loans and electricity bills for farmers, support price of Rs 2,600 for wheat, Rs 2,500 for paddy, and purchase of cow dung at Rs 2 per kg!! Clearly threatened by impending losses, the Modi 2.0 government has made this move.

What does the MSP hike look like? Wheat – the main rabi (winter) crop, with sowing starting in October, and harvest in April — saw a Rs 150 hike per quintal, the highest since 2007-08, when an equal hike was recorded under the UPA government. For the past nine years there has not been such an increase despite the robust 2020-2021 farmers’ protests that had brought the union government to its knees and commit to a withdrawal of three laws seen antithetical to farmer interests.

Madhya Pradesh and Rajasthan, where the Bharatiya Janata Party (BJP) is in a close fight with the Congress, are among key wheat producers in the country and the move is clearly meant to boost the party’s prospects. Besides these two states and Telangana –which also faces a state election and where the BJP has a poor presence are big producers of rabi crops for which the union government e has announced a hike; of them, wheat, with largest hike in 15 years, has the second-highest area under sowing in country.

Analysis of data by experts, as reported both by The Times of India and Indian Express shows, that the annual MSP hikes for wheat ranged from Rs 40 per quintal to Rs 110 per quintal during 2014-15 to 2023-24 period when the focus was increasingly on support prices of pulses and oilseeds to nudge farmers towards crop diversification in order to reduce the country’s import bill.

Key demands of the farmers’ movement (November 2021) even when they welcomed the announcement to repeal the problematic three laws passed, without discussion or deliberation with Indian farmer bodies in June 2020 during the Covid-19 pandemic, remain unmet.

These include:

1. A legal guarantee to Minimum Support Price (MSP) based on the C2+50 percent formula
2. Withdrawal of the draft Electricity Amendments Bill 2021 that the Centre had promised to dispose in earlier talks
3. Removal of penal provisions on farmers in the Commission for Air Quality Management in the National Capital Region and Adjoining Areas Act 2021 (The SKM said that while the government removed some anti-farmer provisions, penal action remains a possibility through Section 15.

Impact of MSP decision

The recent MSP hike approved by the Cabinet committee on economic affairs (CCEA), has some succour to growers of lentil (pulses) and mustard and rapeseed (oilseeds), which have also got the highest absolute increase at Rs 425 per quintal and Rs 200 per quintal, respectively.

Gram, barley, and safflower are other rabi crops whose MSPs have been increased. Way back in the 2018-19 budgetary announcement, the Modi 2.0 government had fixed the MSP at a level of at least 1.5 times the weighted average cost of production of these crops. However, interestingly and significantly, it is in the pre-poll season that these have been acted upon!

According to detailed financial analyses carried out by the media, the margin over average cost of production is the highest for wheat (102%) in the new MSP followed by 98% for rapeseed & mustard, 89% for lentil, 60% each for gram and barley, and 52% for safflower.

Rabi crops are sown during October-January period, and are harvested in April-May. “This increased MSP of rabi crops will ensure remunerative prices to the farmers and incentivise crop diversification. The government is promoting crop diversification towards oilseeds, pulses and ‘shree anna’ (millets) to enhance food security, increase farmers’ income, and reduce dependence on imports,” announced the information & broadcasting minister Anurag Singh Thakur, while sharing details of the Cabinet decision on October 18.

The agriculture ministry’s data shows that the MSP of lentils (masoor) has been increased from Rs 2,950 per quintal in 2014-15 to Rs 6,425 per quintal for 2024-25 marketing season.

Similarly, MSPs of safflower, rapeseed & mustard and gram have seen an increase from Rs 3,000 per quintal to Rs 5,800 per quintal; from Rs 3,050 per quintal to Rs 5,650 per quintal; and from Rs 3,100 per quintal to Rs 5,440 per quintal, respectively, during the period.

MSP of wheat, on the other hand, has seen an increase from Rs 1,400 per quintal to Rs 2,275 per quintal in 10 years.

Source: Unified Portal for Agricultural Statistics (UPAg) and Ministry of Agriculture & Farmers’ Welfare

Apart from wheat, the minimum support price (MSP) has been hiked for the 2024-25 rabi marketing season for gram (by Rs 105), barley (Rs 115), lentil (masoor, by Rs 425), rapeseed-mustard seed (Rs 200) and safflower (Rs 150).

Not insignificantly, a key factor behind that sudden decision of the union government is the fact that farmers have been angry with the Centre over a ban on wheat exports since May 2022, done to control prices of wheat and wheat flour. While announcing these hikes, the government shrugged off apprehensions of the MSP rise creating a pressure on prices, and said the hike was in line with the Union Budget 2018-19 announcement of fixing the MSP at a level that is at least 1.5 times of the all-India weighted average cost of production.

Gram Production Estimate. Source: Unified Portal for Agricultural Statistics (UPAg) and Ministry of Agriculture & Farmers’ Welfare (The Indian Express)

Apart from the upcoming state assembly elections, all the five election-bound states are crucial to the 2024 Lok Sabha polls next year, accounting for 83 MPs in all.

Breakdown

* Madhya Pradesh: The central Indian state, which saw the Congress win narrowly in 2018 –before the infamous Operation Kamal that toppled an elected government –the government lost power in less than two years owing to defections to the BJP, is the top producer of masoor in the country, the second largest producer of gram, wheat and rapeseed-mustard, and the fourth largest producer of barley. Agrarian distress and farmer anger is one of the top poll issues in the state, where 70% of the population is linked to the agriculture sector. Farmers have been facing problems like low crop prices, high input costs, erratic weather, crop damage, debt and lack of infrastructure support.

Lentil Production Estimate. Source: Unified Portal for Agricultural Statistics (UPAg) and Ministry of Agriculture & Farmers’ Welfare (The Indian Express).

The BJP is however still banking on its state and central schemes — Mukhyamantri Kisan Kalyan Yojana, PM-Kisan and the Pradhan Mantri Awas Yojana (for housing).

* Rajasthan: A state held by the Congress, where the ruling government is fighting hard to beat the pattern of regime change known to the state’s politics, Rajasthan is the largest producer of barley and rapeseed-mustard, the third largest producer of gram, and the fifth largest producer of wheat and lentil.

Safflower production estimate. Source: Unified Portal for Agricultural Statistics (UPAg) and Ministry of Agriculture & Farmers’ Welfare (The Indian Express)

During his campaign rally in Rajasthan, Prime Minister, Narendra Modi had flagged the Congress promise of farmer loan waiver and asked if people had received it. He had also accused the Ashok Gehlot government of leaving “no stone unturned” to stop the Narmada water organised by the Centre from reaching Rajasthan’s farmers.

The Congress is, on the contrary, relying on the Eastern Rajasthan Canal Project, which is expected to ensure water for drinking and irrigation in 13 districts of the state, and alleging that it this has been stalled due to the Modi government.

For the first time last, the Gehlot government, in a significant move, had presented a separate agriculture budget.

* Telangana: The state, where the Bharat Rashtra Samithi (BRS) is in power and where the BJP faces an uphill task in the wake of a Congress resurgence, is the third largest producer of safflower in the country.

The BRS government has a reportedly successful scheme in Rythu Bandhu, and in its manifesto released recently, the party promised to raise farm investment support under it to Rs 12,000 per acre per farmer, from Rs 10,000 right now.

Rapeseed and Mustard production estimate. Source: Unified Portal for Agricultural Statistics (UPAg) and Ministry of Agriculture & Farmers’ Welfare (The Indian Express)

It was only in 2022, last year, that the BRS government– until then seen as “friendly” to the Centre – had launched protests against the Modi government demanding that it procure paddy after a bumper crop in the state.

The Congress, the primary opposition party in the state, has promised to increase farmer support to Rs 12,000, and said it would also pay crop investment support to tenant farmers.

* Chhattisgarh, Mizoram: Neither of these two states do not account for much of the rabi crops which saw an MSP hike on Wednesday.

The Bhupesh Baghel government in Chhattisgarh, though, has been banking big on farmers, with the ruling Congress in a tussle with the Centre over credit for the state’s high procurement price for paddy (the highest in the country). It remains one of the main poll issues in the state.

MSP for Wheat

Wheat is the second largest crop (after paddy) in terms of area coverage in the country. In crop year 2022-23, the area under wheat stood at 318.25 lakh hectares, and its production 110 million tonnes (MT).In the 2023-24 rabi marketing season, the Centre has procured 26.2 MT of wheat for the central pool, benefiting 21.28 lakh farmers. Of these 21.28 lakh farmers, 7.96 lakh are from MP, or 37.4% of the total.

The new MSP will be effective next summer season, around the same time as the Lok Sabha elections. The new MSP over the 2023-24 rabi marketing season is the highest hike for wheat in the last 15 years in absolute terms. At 7%, it is also the highest in the last 12 years in percentage terms.

Barley production estimate. Source: Unified Portal for Agricultural Statistics (UPAg) and Ministry of Agriculture & Farmers’ Welfare (The Indian Express)

Top producers, 2022-23

Wheat, MSP hike 7%

UP: 336.10 lakh tonnes or LT

MP: 227.3 LT

Punjab: 167.83 LT

Haryana: 109.36 LT

Rajasthan: 106.36 LT

Barley, MSP hike 6.63%

Rajasthan: 11.26 LT

UP: 5.92 LT

Haryana: 0.46 LT

MP: 0.39 LT

Uttarakhand: 0.28 LT

* Gram, MSP hike 1.9%

Maharashtra: 31.75 LT

MP: 30.95 LT

Rajasthan: 18.09 LT

Gujarat: 12.98 LT

UP: 8.98 LT

Rapeseed-mustard, MSP hike: 3.67%

Rajasthan: 58.32 LT

UP: 16.20 LT

MP: 15.51 LT

Haryana: 13.02 LT

West Bengal: 8.16 LT

Lentil (masoor), MSP hike 7.08%

MP: 6.36 LT

UP: 5.17 LT

West Bengal: 1.51 LT

Bihar: 1.32 LT

Jharkhand: 0.48 LT

Safflower, MSP hike 2.65%

Karnataka: 0.56 LT

Maharashtra: 0.23 LT

Telangana: 0.08 LT

Andhra Pradesh: 0.03 LT

(This report relies a lot on the date crunched by The Indian Express)

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The Press Information Bureau of India (PIB) has issued a statement saying that the wheat procurement by government agencies surpassed last year figures despite a delay due to Covid-19, unseasonal rain and tight labour supply.

The Covid-19 pandemic came as a big hit to farmers who suffered issues with delayed procurement of their crops, leading them to settle for lower prices than they would normally get had the situation been normal. However, the Ministry of Public Affairs, Food and Public Distribution issued a statement that this year’s procurement of wheat touched 341.56 Lakh Metric Tonnes surpassing last year’s supply by 25,000 tonnes which stood at 341.31 Lakh Metric Tonnes.

While now, the Centre rests easy on having surpassed last year’s procurement, the process has been fraught with challenges for both, the agencies and the farmers. Here is a look at some.

Challenges in procurement agencies and farmers

For procurement agencies

The statement by the Food and Public Distribution Ministry said that the national lockdown delayed the procurement of wheat which generally takes week in the first week of April after the harvesting is done in the end of March. Due to this, the procurement only began on April 15, except for Haryana, where procurement began on April 20.

Another challenge was getting farmers to maintain social distancing at the procurement centers to ensure that their health wasn’t affected. For this, the number of procurement centers of increased to make sure that footfalls at centers were distributed and there was no large gathering at just one centre. The Food Ministry said that new centers were made available at the gram panchayat level and the numbers were increased sharply in the major procuring states like Punjab where it went up from 1836 to 3681, 599 to 1800 in Haryana and from 3545 to 4494 in Madhya Pradesh. To avoid overcrowding at procurement centers, farmers were also given specific dates and time slots to bring their produce and only those people involved directly with the process were allowed to be at daily auctions.

The issue of not enough jute bags to carry grains was also once that procurement agencies faced due to jute mills being closed. This they handled by using more plastic bags and bags that had been used before, subject to strict quality conditions.

Unseasonal rains also played a dampener for procurement. The rains in North India hit the standing and harvested wheat crop, thus affecting the quality of grains. KAP Sinha, Punjab’s Principal Secretary (food and civil supplies) had told Hindustan Times, “Moisture more than permissible limits of 12% leads to delay in procurement as the crop has to be dried first. It damages the grain, leading to its discolouration.” However, after demands from farmers and the Opposition demanded that the moisture content specifications be altered from 12 to 18 percent, their ask was considered by the Food Corporation of India (FCI) and the Government of India (GOI) after conducting a detailed and specific analysis to make sure that the farmers were not distressed and the grains met minimum quality requirement of the consumers.

With a fear of the infection in the masses and labour being in short supply, the Food Ministry ensured that it conducted confidence building measures at the local level by the state administration and also provided workers with adequate safety equipment like masks, gloves, sanitizers, etc.

For farmers

The untimely rains and shortage of labour created a vicious loss cycle for farmers. Grains were rejected due to discolouration before the procurement norms were relaxed and post that, they had to settle for lower prices for their harvest.

Keeping social distancing in mind, only 100 farmers were allowed to bring their farm produce to the state mandis. The Punjab and Haryana guidelines had been issued to all markets that only 50 farmers each would be allowed in a mandi from 8 am to 2 pm and 2:30 pm to 6 pm daily, Hindustan Times had reported in April. In the Rabi season, farmers were only allowed to sell 40 quintal of produce daily, enhancing their woes of storage, thus making them take extra trips and spend more on loading and unloading of materials.

With traders buying from farmers directly, the minimum support prices (MSP) have been hit. Farmers allege they received much lesser than the MSP of Rs. 1,925 per quintal fixed by the government. It was reported by agencies like Cogencis that farmers in Jaipur had to sell wheat at Rs. 1,830 – Rs. 1,880 per quintal.

Speaking of mismanagement by mandis as being another blow to farmer incomes, a farmer from Barha, Jabalpur, explained to The Print as to how under a new system called ‘sauda patrak’, traders decided at what rate they wanted to procure the produce and state governments officials couldn’t intervene in the matter. While the scheme was brought about to reduce the intervention of middlemen, it turned into an exploitation technique.

While challenges still prevail, the Food Ministry stated that with the well-coordinated efforts by the government of India, FCI, state governments and their agencies, the procurement of wheat was done smoothly and farmers too were helped in the bargain.

The press release by PIB may be read below.

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Image credit:  Manas Roshan

In the beginning of November, Dheerpal Yadav had finished the harvest of his paddy crop and was preparing to sell at the mandi in town. Thanks to timely monsoon rains this year, his 10 bighas of land in Sainjhani village in Uttar Pradesh’s Budaun district had yielded a bumper crop.

Then the rug was pulled from under his feet.

On the evening of November 8, Prime Minister Narendra Modi announced the demonetisation of large currency notes. Over the next few days, there was chaos in the mandis, where all transactions between farmers and traders take place in cash.

“If we took the old notes, they [traders] would give us Rs 1,200 for a quintal. If it is the new notes you want, then just Rs 1,000,” said Yadav, standing in his fields outside the village. “Why would I take the old ones? I took the new notes. I wasn’t getting any from the banks.” Sainjhani has one bank branch, which also services residents from six surrounding villages.

Dheerpal’s larger problem was the sowing season for wheat that loomed ahead. He needed Rs 5,000-6,000 to buy seeds, fertilisers and hire a tractor to plough his little plot. The money he had earned from selling paddy was running out after he paid for the expenses of his household of six and settled his debts. Dheerpal borrowed about Rs 3,000 from a moneylender – at 5% monthly interest – but it was not enough to hire labour. In December, by the time he planted his crop with the help of his old tai and tau (aunt and uncle), he had lost two weeks.
 

Dheerpal Yadav (centre) with his family in Sainjhani village in Budaun, Uttar Pradesh.

Across villages in Budaun and Bareilly – two districts in Western Uttar Pradesh that Scroll.in visited – farmers said only about 70% of sowing was complete. Not only was sowing delayed, many farmers had not been able to purchase new seeds and had fallen back on the grain they had saved for the household. Many chose to forgo the use of fertiliser.
But officials in the agricultural department denied demonetisation had dampened rabi sowing. “Sowing has been completed on 2.2 lakh hectares of the 2.57 lakh hectares target we had set. That is about 85%,” said Vinod Kumar, the district agricultural officer of Budaun. “The rest should be done by the end of December.”
The Union Ministry of Agriculture’s weekly crop statistics since November have consistently painted a similar picture of normalcy for the country: steadily rising estimates of the sown area of wheat, with the difference between this year’s acreage and the five-year average narrowing down to just one percentage point.

But the ministry’s releases contain a rider: these are “eye estimates”.
How reliable is the data, then?

‘Haven’t started survey, how can I give data?’

In Uttar Pradesh, which contributes a quarter of India’s wheat production, the largest share among all states, officials admitted that crop surveys begin only at the end of the sowing period in January. In the interim, the state agriculture department relies on “eye estimates” gathered through “general observation” by its field staff.

Dr Vinod Singh, a director at the state agricultural department, said it has at least three sources for the information. “Our krishi sahayaks on the ground in each block gather data,” he said.

Scroll spoke to one such sahayak or technical assistant in Budaun, Govind Sharma, based in Bisauli town. Sharma said that the technical assistant’s job is primarily agricultural extension work – informing farmers about new technology, fertiliser use and so on. Data gathering was limited to a few conversations with a few village pradhans once a month.

The other source pointed out by Dr Singh is the Mahalanobis National Crop Forecasting Centre in Delhi, established by the central government in 2012 to use satellite imagery to prepare crop forecasts and assess damage caused by droughts and other weather phenomena. “It’s a very accurate system and its findings are combined with data from the field staff,” he said.

But the most sophisticated satellite in space – which India does not possess – can at best generate images at a 0.41 metre resolution. This can help tell the difference between a car and a scooter. Standing on an empty plot, or even observing Dheerpal and his family scattering seeds in Sainjhani, it is difficult to tell which crop they were sowing.

The third source was the field staff of the revenue department. Since the department of agriculture has very few officers, it is the duty of the lekhpal, or the village-level accountant of the revenue department, to maintain a khasra (land use register) of the farmers. The khasras are updated after the sowing and harvest each season and a jinswar statement (sown area under various crops) sent to the higher officials at the tehsil level, then compiled for the district and finally the state. There are 33,000 lekhpals in Uttar Pradesh. Budaun and Bareilly each have about 100 lekhpals for over 2,000 villages.

“We get our data from their records, which describe the overall crop trend in each village,” said Yadav, the district agricultural officer, Bareilly.

But farmers said sightings of the lekhpal were very rare. “He sits in his office and makes up the numbers,” said Rishipal Singh, a 50-year-old resident of Sainjhani. Sunil Kumar, a farmer from Gangola village in Dataganj, another block of Budaun, said the same. “The lekhpals sometimes talk to the pradhan but how does the pradhan know what’s happening on everyone’s farm? Last year I finished sowing at the start of January. This year it will be delayed.” Kumar has finished sowing on an acre but still has three more to complete. In the second week of December, he spent six hours in line at the local bank and got only Rs 1,000 in the end.

The officials of the revenue department in both Budaun and Bareilly admitted their surveys for the rabi season only begin in the second week of January. “If I haven’t started my survey yet, how can I give you any data?” Suresh Pal Singh, a lekhpal in Budaun said in exasperation when pressed him for information. Then where did the department’s data come from? “It might be a modified version of the kharif estimates from September, or even last year’s rabi data,” he said.
 

Ninety percent of Budaun's farmers have land holdings of less than 10 bighas.

Sown area vs yields

The advance estimates, cursory as they are, tell us even less about how sudden disruptions, economic or climatic, affect farmers and agricultural production.

The data for sowing does not change dramatically at the end of each season because farmers don’t have the luxury of leaving their fields fallow. But the crop yield is affected by the inputs they are able to purchase and use – something that government data does not capture.

Both farmers and input traders said yields this year would be low. “Business in this market is down by 40%,” said Sumit Kumar Saxena, who sells seeds and pesticides in Bareilly. “Many of us have two or more trucks full of products sitting in the godowns.”

“The farmers can’t choose to skip an entire crop. He will definitely sow but yields will reduce by at least 30%,” Saxena added.

In an uncharacteristic embrace of organic methods, the agriculture department responded saying yields would be better this way. “Scientific studies have shown that soil fertility improves if farmers don’t use chemicals for one or two crop cycles,” said Vinod Kumar, the Budaun agricultural officer.
 

Rishi Aggarwal, owner of the Chola Seed Store in Budaun. He said seed and fertiliser sales had declined by sixty percent since the demonetisation.

Farmers like Rishipal Singh in Sainjhani also fault the technocrats in the administration for a lack of understanding of how the ability to take risks and withstand shocks varies between large and small farmers. Singh, who grows sugarcane on his land in the kharif season, said he didn’t have a contract with the local sugar mill, which would have ensured fair prices for his produce. “The private traders will give me Rs 250 per quintal if I take the old notes and only Rs 200 for the new ones.”

While Rishipal Singh delayed cutting the cane hoping for a better price, Sachpal Singh in the adjacent Qadar Chowk block appeared unaffected by the note ban. His family of four brothers has a contract with the sugar mill and receives payments in full directly into bank accounts. “We were able to sow [wheat] early,” said Sachpal. “There was some inconvenience but we made arrangements. The sowing has to be done on time.”
The family owns 100 bighas (nearly 20 acres) of land. According to the Budaun agricultural department, 90% of the district’s farmers own under 10 bighas.

‘At best, an informed guess’

Unmindful of such nuances, Radha Mohan Singh, the Union Minister of Agriculture, has cited the weekly rabi sowing data as a rejoinder to criticism of the government’s demonetisation decision. “This is going to directly benefit farmers and poor people,” he said.

But there are signs that the government itself does not trust the data. On December 8, the Central Board of Excise and Customs slashed the duty on wheat imports into the country from 10% to zero. Some commentators read the decision as an admission by the government that demonetisation might lead to a decrease in yields and overall production across the country. The reduction in import duties was seen as a preemptive move to avoid a further rise in wheat retail prices. Earlier this year, private traders claimed that the Ministry exaggerated last season’s wheat production by about 10 million tonnes, which the ministry has refuted.

Himanshu, an associate professor of economics at the Jawaharlal Nehru University, studies agricultural markets and issues of food security. The Food Ministry, which oversees grain imports, has had problems with agriculture ministry data for many years, he claimed.

The Food Ministry did not respond to Scroll’s request for a comment, but the millers, who lobbied for the reduction in import duty, agreed that this was the case. “By last May, wheat stocks with the mills had dried up and we told the food ministry that the numbers weren’t correct,” said Veena Sharma, secretary of the Roller Flour Millers Federation Of India. “They reduced the duty from 25% to 10% in September. But they realised that even this wouldn’t be enough.”

Said Himanshu: “At best, the data is an informed guess by the officials. The guess could very well be misinformed, too. At worst, they could be cooking up the data.”

All photos and video by Manas Roshan.

Courtesy: Scroll.in.

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