The upcoming Economic Survey for 2019-20 may have some new prescriptions that can address travails of the large sections of farmers who roil under low income for their produce, big loans and lose foodgrains for lack of proper logistical facilities.
The Survey will be presented by the new Chief Economic Advisor Krishnamurthy Subramanian who will roll out his first official Survey.
An improvised version of higher MSP (minimum support price) for the farmers is likely to be suggested in the Survey, said a source. Farmers are battered by low prices in India and are under huge debt which sometimes lead to them committing suicide.
The Survey may not directly encourage loan write-offs as that can go against sound credit culture of PSU banks, but it may suggest more flexibility for the farmers on the repayment of these loans with longer tenure in case of low yield from the crops, low remuneration, or crops lost or damaged due to natural disasters.
It could also induce discipline for timely repayment of short-term crop loans where it may suggest a higher Interest Subvention Scheme for prompt repayment.
The Survey also is likely to focus on higher MSPs for all the key crops of both Kharif and Rabi. Under the current practice, the government fixes MSPs for both Kharif and Rabi crops on the recommendations of the Commission on Agriculture Costs & Prices (CACP).
It could also suggest private sector to be tapped for setting up warehouses and cold storage chains to store foodgrain and save them from being wasted.
But the MSP can only be for crops as vegetables do not fall under the MSP and here the government purchases crops from the farmers at a certain assured price which the Survey may fix at a higher amount.
Farmers need to get more for their produce due to excess supply. The Survey is likely to ask the government pay for the loss the farmer is making by getting less remuneration for produce like paddy, pulses, sugar, fruits and vegetables, said the source.
Questions sent to the CEA Subramanian's office remained unanswered.
There is a current glut in food crops due to bumper crops which has led to the prices hitting low for the farmers. Food inflation has fallen to the lowest level since 1991. Credit rating agency Crisil has said food inflation measured by Consumer Price Index rose only 0.1 per cent in 2018-19. Food inflation has been gradually falling since and farmers fear its continuation.
In the Union Budget for 2018-19, the government had announced that MSP for all Kharif crops not hitherto covered will be 1.5 times the cost of production. This was followed by a government decision on July 4, 2018 to increase MSPs for all Kharif crops for 2018-19 season at a level of at least 150 percent of the cost of production.
Farm loans and low prices are the key reasons of agrarian distress in India and the Survey may offer some solutions to them.
So important are these two issues for Indian farmers that low growth in farmers' income was attributed to the ruling Bharatiya Janata Party's (BJP) loss in the last round of Assembly elections, particularly Madhya Pradesh, in December.
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