Ramanjaneyulu
Kiran Vissa
Alliance for Sustainable and Holistic Agriculture

 Ever increasing costs of cultivation due to externalization of inputs specially seeds and pesticides and increasing labor costs
 Increasing tenancy and tenancy costs…
 Dependency on traders and dealers for credit
 Increasing ecological costs due to high chemical use
 Decreasing margins to farmers-reducing incomes

• Farmers’ Suicides
• Migration
• Cultivated Fallows
• Crop holiday

• Total are in Konaseema-1.9 lakh acres
• Current crop holiday-90,000 acres
• Total mandals in WG konaseema 16
• Crop holiday in completely in Allavaram,
Uppalaguptam, I.Polavaram, Katrenikona and partial in other mandals

Land holding
Category Total Income
(Rs/month)
Expenditure
(Rs/month)
Percent of farmers
<0.01
0.01-0.4
0.4-1.0
1.0-2.0
2.0-4.0
4.0-10.0
>10.0
Landless
Sub marginal
Marginal
Small
Semi-medium
Medium
Large
Total
1380
1633
1809
2493
3589
5681
9667
2115
2297
2390
2672
3148
3685
4626
6418
2770
36 %
31 %
17 %
10 %
6 %
All farmers
Source: Report “On Conditions Of Work And Promotion Of Livelihoods In The Unorganised Sector” Arjun Sen
Gupta Committee, 2007

• The agriculture prices are not fixed taking into livelihood needs of the farmers.
• The rising inflation always had a double impact on farmers with increasing costs of living and decreasing incomes due to reduction in agriculture prices as a result of price intervention mechanisms of the government.
• Minimum Support Prices are announced for 25 commodities and market intervention operations exist only for rice and wheat. So farmers growing other crops are left to the mercy of the markets.

year
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
MSP** Cost of Production
(Rs./q)*
578
570
580
700
1000
1200
1500
1800
560
560
570
675 (incl. bonus of Rs. 25)
875 (incl. bonus of Rs. 25)
950 (plus of Rs. 50)
1030 (no bonus)
1080 (?)
*Cost of cultivation data from few states by DES http://dacnet.nic.in/eands/ up to 2010 the remaining two years data is collected from field.
** MSP announced by Government of india http://www.dacnet.nic.in

• In 2007-08 govt of AP has re-started Rice scheme at Rs. 2/- and restricted open market fine rice price to Rs. 20/- Which has brought down farmers open market price
• 2009-10 warehouses full and Govt has not procured most of the paddy from farmers
• 2010-11 govt procured only 4.7 lakh tons (of 60 lakh tons remaining from 2009-10 and 100 lakh tons produced in kharif 2010) for want of space. The rabi produce of about 60 lakh tons is pending.
• Government of India announces MSP for 25 crops but procures only
Rice (October-September) and Wheat (April-March). Procurement of millets happens only on a very small scale. In that also currently only 25.8% of of the net production of food grains are procured.
Only 18.9% of the net available food grains are distributed through the PDS.

Procurement of various food grains by the Government
(2004-05 to 2010-11)
Year Rice
Produc tion
Procure ment
Wheat
Product ion
Procure ment
Coarse grains
Producti on
2004-05 885.3
246.85
721.5
167.95
276.0
2005-06 831.3
276.56
686.4
147.87
334.6
2006-07 917.9
251.06
693.5
92.26
340.6
2007-08 933.5
287.36
758.1
111.28
339.2
2008-09 966.9
336.85
785.7
226.89
407.6
2009-10 991.8
301.34
806.8
253.82
400.3
2010-11 225.25*
Procure ment
8.27
11.51
0.00
2.03
13.75
4.08*
Total produc tion
Procure ment
1882.8
423.07
1852.3
435.94
1952.0
343.32
2030.8
400.67
2160.2
577.49
2198.9
555.08
Source: Koushik Basu (2010) Economics of Food grain management in India and Data from Directorate of Economics and Statistics and updated from Ministry of Food and Civil Supplies website.

Name of the Crop States where the C2 cost projection by CACP for 2005-06 were not covered by
MSP of 2004-05
Paddy A.P, Assam, Haryana, Karnataka, Kerala, M.P, Tamil Nadu & West Bengal
Jowar
Bajra
Maize
Ragi
Tur [Arhar]
Moong
Urd
Gram
A.P, Karnataka, M.P, Maharashtra & Tamil Nadu
Gujarat, Haryana, U.P, Maharashtra
A.P, H.P, Karnataka, M.P, Rajasthan & U.P
Karnataka, Tamil Nadu
A.P, Gujarat, Karnataka & Orissa
A.P, Maharashatra, Orissa & Rajasthan
M.P, Maharashtra, Orissa, Rajasthan & Tamil Nadu
Haryana, Rajasthan
Barley Rajasthan
Based on K. Ramasubba Reddy’s paper and compiled using data from Directorate of
Economics and Statistics http://dacnet.nic.in/eands/costofcultivation.pdf

Andhra Pradesh
Assam
Bihar
Chandigarh
Chhatisgarh
Haryana
Jharkhand
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Punjab
Tamil Nadu
Uttar Pradesh
Uttaranchal
West Bengal
Total :
Procurement of rice during 2009-10 by FCI and State Agencies
(In '000 tonnes)
State / U.T
2009-10 *(OCTOBER to SEPTEMBER)
FCI State agencies
6228
8
283
14
437
81
15
72
0
0
55
190
474
0
374
207
252
8690
204
0
549
0
2705
1737
7
10
261
194
156
2277
8801
1143
2317
169
914
21443
Total
6432
8
832
14
3141
1818
23
83
261
194
211
2467
9275
1143
2691
375
1166
30134

Rice 60
Broken rice 7
Fine Broken rice 4
Coarse Rice
Kgs Price
Rs/kg
Total
(in
Rs)
17
11
1020 62
77 7
Fine Rice
Kgs Price
Rs/kg
Total
(in
Rs)
20
11
1240
77
Bran
Husk
Total
10
18
8
11
10
32 4
110 10
180 16
1419
8
11
10
32
110
160
1619

Procurement of Paddy under MSP by SHG's
(Rabi and Kharif) 2006 to 2010-11
No Year Season
No. of
Dists
1 2006-07 Kharif 11
Rabi 13
2 2007-08
Kharif 12
Rabi 13
3 2008-09
Kharif 8
4 2009-10
Rabi
Kharif
13
7
5 2010-11
Total
Rabi 13
No. of
Mandals
159
198
133
200
100
233
40
168
No. of
Procurement
Centers
188
316
257
436
272
541
61
296
Qty in
Tonnes
63954
330052
75418
334441
205630
584380
18073.2
Value in Rs in
Crores
40.79
214
57.92
259.1
189.7
543.3
18.47
Earned
Commission
Rs in Crores
0.61
2.71
0.81
3.38
2.69
7.94
0.28
213663
1825611
218.7
1542
5.2
23.63

• MSPs should take into account actual costs of cultivation and living costs (corrected to inflation rise)
• NFC’s recommendation (Cost C2+50 %) can be used as a guide
(Rs. 1800/q for 2010 paddy and wheat based on 2009 cost calculations)
• Price differential (MSP –actual realised/procurement price) should be paid directly to farmer
• Producers are consumers: Only 20-30 % is procured…what about more than 40 % produced-consumed
• Costs cannot be based only on COC as they could be low for crops like sorghum and where people use their own inputs

• Nutrient based subsidies to be extended to organic also
– Recast fertiliser subsidy to support farm made organic inputs
– Rs. 5000/ha which as soil nutrient subsidy which can be used for organic inputs
• Labour subsidies
– Subsidise Farm labor by Rs. 100 per day (which is equivalent to unskilled work under NREGA) balance if any to be borne by farmer
– Labor subsidy (40 days/crop @ Rs. 100/day) which may cost about Rs.
76,000 cr/year
– For working in their own fields or hiring labor. Generates additional labor days
– Brings down costs of cultivation by Rs. 4000/ha
• Seed and other input subsidies
– Rs. 1000/ha

• Today only small part of the total production is procured by the govt.
• Government can use the women self groups, farmers cooperatives and other community based organisations for procurement of the paddy
• In states like Chhattisgarh state governments have established efficient systems of procurement and distribution.
• AP also should move into a system of procuring and going for custom milling rather than procuring through millers

Income per ha
• At farmers level it benefits to an extent of Rs. 10,000/ha (Rs.
5000 from fertiliser subsidy and Rs. 4000 as labor subsidy)
• Benefit from price rice Rs. 13,000 (avg Rs. 600/q for 22 q of cereal grains)
Income per family
• Rs. 10,000 from NREGA (100 days @ Rs. 100)
• Total benefit per family would be at least Rs. 25000/- in addition to the income from farm produce bringing them out of poverty
Direct Income Support
• If the income falls short of minimum income it needs to be supported directly

• Farmers Income Commission as a statutory body which examines the real income of farmers every year across the states.
– Make specific recommendations to ensure that farmer families are assured a minimum income (to meet living costs per family based on current estimates it would be about Rs. 25,000)
– Consider actual costs of cultivation, prices realized, subsidies given and suggest mechanisms for compensating the differential as Direct Income Support