Farmers declaring crop holiday in Krishna district of Andhra Pradesh
(photo courtesy: The Hindu)

The piling paddy stocks and the unremunerative paddy price forced three lakh farmers of Andhra Pradesh to declare crop holiday in the rice bowl of East Godavari district. This would result in the loss of 350 lakh tons of paddy and adversely affect the livelihood of millions of families. They have refused to sow for the second growing season, the rabi crop.

This unique phenomenon is spreading to other food bowls in India. The Consortium of Indian Farmers Association has called the farmers in Punjab to declare crop holiday in 10 per cent of land against low price for wheat and rice. Elsewhere in the country farmers who are growing paddy are being forced to quit due to spiraling input costs of fertilizers, seeds and labor.

Ideally in a free market economy with decreased supplies, the prices should be higher at the farm gate. Surprisingly, in many paddy-producing regions in Karnataka there are no takers for paddy. Neither the traders, nor the rice mill owners are willing to buy paddy. Forget about the recovery of cost of production, the farmers of cereal crop like paddy are unable to sell their produce.

Obviously, the rural agricultural economy in the paddy cultivation regions is in dire crisis, as there is abundance of paddy that has no buyers. As the farmers are about to bring in their paddy harvest of the kharif season into the market, the price has plummeted and in many places the traders are refusing to buy paddy due to high stocks and volatile price fluctuations.

What is intriguing is that the retail price of rice has not come down. In cities like Bangalore, retail price is above Rs 25 per kilogram for ordinary varieties and more than Rs 30 for finer varieties. The double-digit inflation of food prices is due to rise in food prices, especially rice and vegetables. However, these high retail costs are not transferred to farmers who are primary producers. The middlemen and the wholesale and croporate dealers are raking windfall profits, without any government control.

The record production of food grains, brimming granaries and good monsoon have led to increased supply of agricultural products. Contradicting the economic theory of inflation coming down with more production, we are witnessing double digit inflation!

The delusions about the market imperfections have disastrous consequences for food security and paddy farmers. The policy makers in the government are deliberately ignoring this contradictory trajectory that will lead to the impending food crisis in the coming years leading to food shortage.

The solutions offered by the state and central governments to address this crisis are not only inadequate but have failed to rescue the farmers. The Kanda Committee set up to study the crop holiday in Andhra Pradesh has recommended hike in Minimum Support Price of Rs 1200 per quintal of paddy, whereas the central government has agreed to hike it to only Rs 1080. Compare this to Rs 1800, the actual cost of cultivation of one quintal of paddy for the current crop season in Andhra Pradesh for 2011-12.

These packages and policy interventions by the government are ad hoc and have failed to transform agriculture and rural economies. Inadequate and falling investment in agriculture, low employment and disincentives through macro economic policies have played havoc with those who feed the country.

Abandoning the activity of growing food in diverse eco-zones of the country will set in a process of erosion of knowledge and skill of cultivation that has been the repository for centuries.

The negative growth in agriculture is bound to have adverse impact on the overall health of economy. We need to think and find innovative ways to keep the framers on the farm and make farming profitable that supports rural livelihood, the backbone of the country.

In contrast to this, the government policies have deliberately suppressed the cereal prices, leading to unprecedented farm crisis. This artificial low price has paved the ground for impending takeover by corporate farming under contract farming. The policy shift is outlined in the Approach Paper to 12th Five Year Plan which states, “permit leasing of land of small farmer, which are unviable and can be leased out to others to bring in the input needed. He may even be employed on the land by new tenant farmer”.

It is ironical that the crisis is branded as ‘crop holiday’ as if farmers are happy taking a break, enjoying their free time. This is in total contradiction to the deprivation and marginalization of farmers who are forced to the wall, unable to eke out a living. It is not a crop holiday but an epidemic and warning of an impending tsunami in the agricultural fields that will wipe out millions of livelihoods in the coming days.

Is our planning commission, the rulers aware of this? Or they are showing deliberate ignorance to pave way for corporate take over of farmland?