Agriculture

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Book Review : Death Of A Moneylender

Published September 4, 2016 by vishalvkale

DEATH OF A MONEYLENDER
Image result for death of a moneylenderI picked this book up from Western Book Store, Sadar, Nagpur, as I was strolling the market; just missed the Author who had visited the same store… a deep regret for me! Coming to the book, this is a book of rare skill, a book that defies description as it successfully blends two diametrically different genres into one composite whole. It is also a book, with some detailing and  alteration, that can become an excellent non-fiction work as well, and that is its true strength. This is the third book by the current author I have read, and it has to be said that each work has been different from the others, each has been really good, which speaks volumes for the versatility of the author. 
THE CHARACTERS
Falak : Journalist, clear headed in his ideology and approach towards his job and his vocation. Also highly confused about his his ideology and approach towards his job and his vocation… yup, both in the same person at the same time!
Vani : 1/Falak; Inversely Proportional to Falak, Falak * -1; The Opposite of Falak. And yes, She loves, and she doesn’t love him, both at the same time. Go figure!
Bhanu : Don’t jump to conclusions. Please don’t.
THE PLOT
The plot revolves around the death of a moneylender in a remote village; the only problem was that this particular character was quite well loved in more ways than one.  A genuinely gentle man with a helpful attitude, and a propensity of forgiving loads or readjusting payment schedules, he wasn’t one of your rural toughs who arm twist people and charge immense interest rates. To further  complicate matters, he was a highly educated man in agriculture, educated in the sense that he would try out the best and latest techniques, methods, and be a guide to villagers. Not the kind of man that would fall prey to a set of vengeful villagers, which is what this village was – angry. Who killed him – and why? Why was this  genteel guide and friend of the village murdered, apparently by a mob?
As an undercurrent to the main story, and beautifully intertwined with it, is a superb secondary line of thought : two journalists with divergent approaches; one who believes the end justifies the means, and reportage is primarily editor and organization driven rather than content and reality driven – while the other having diametrically different approach, that of due diligence, authoritative research, hard legwork, focus on the facts and the truth; and a commitment to bringing the reality to the fore. Both these stories superbly connect at a series of points in the book as well as provide food for thought
THE REVIEW
This is a thought-provoking book; in fact, so powerful is the presented narrative that I would like  to ask the Author to – whenever she feels she has enough data regarding these affairs, and latitude in her day job, to present a non-fiction work along these lines, presenting the reality of the on-ground situation. Admittedly, that would be a tough ask, and is bound to take time as well as  solid research and carefully worded and phrased content, given the topic. I hope she does  do it; I would certainly like to read it.
It takes you deep into village life, and particularly the village and farming economy – not on a paper-level, or on an analytical level; but on a gut-wrenching hard-hitting level of the individual farmer, as well as the socio-cultural mileu and environment of a village. Even I, who have identified farming credit as one of the key contributory factors of the farming scenario in India in my Agriculture Series, was hit hard at this personal approach, despite being reasonably familiar with the reality. The difference is that while my understanding is basis reading a series of research papers, I get the feeling this book has a lot of personal experience behind it, and it shows.
{For the layman : for a basic understanding, please read this article in my series, which lists the main issues and gives a small commentary regarding the same}

A this point, a word about the one point in this book that struck me the most – the writing style {I could be wrong, of course}, seemed at variance with the previous work {Her latest – The Honest Season}; the words, phrases and style was almost like a moving video; you would draw images in your mind as your reading progressed. As suits this style, the charectarisation has been kept strictly minimal; and the entire focus was on the content and the story.
The story is very fast; in fact, surprisingly fast for this genre and this deep and frankly slightly darkish content. This is a book that you will read in one sitting, and enjoy it immensely too. There are precisely zero needless detours despite their being an excellent opportunity for a detour into a love angle. This temptation has been thankfully avoided, and the focus kept on the story in what praiseworthy and commendable focus – also adding a lovely spice of suspense to the story…

The story has been adroitly handled, and presented in a manner that heightens your interest, invoking reading passion into the subject; this keeps the reader riveted. The straightforward story of a moneylender bends somewhat when it emerges that this guy was a very well loved man indeed; but then why are the villagers so clearly angry? Even more pertinent, why has he killed? Read the book to find out more; all I say is that this is one of the finest works of fiction I have read, and rate it 5 stars! 
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Farm Gate Prices And Urban Apathy…

Published June 16, 2016 by vishalvkale

Today’s Indian Express carries an interesting article on the rural landscape of India, bringing to the fore a superbly balanced presentation of the farm gate prices issue: should farmers be able to sell as per their choice, and not just through the APMC-demarcated regulated market   yards and auctions. This raises many questions, as we shall see. But first, the article in question:



APMCs were originally established with a view to prevent exploitation of farmers by intermediaries, who compelled them to dispose of their produce at the farmgate at very low prices. By mandating all farm produce to be brought to regulated market yards and sold through auctions, the APMC mechanism was meant to ensure fair prices to farmers. But in many cases, these bodies have themselves become dens for cartelisation by traders, who control prices and charge hefty commission fees on produce transactions.

An extreme case that surfaced recently was of Devidas Maruti Parbhane. This farmer from Vadgaon Rasai, a village in Pune district’s Shirur taluka, supplied one tonne of onions early this month at the local market yard under the Pune APMC’s jurisdiction. The price he got — a little more than Rs 1.5 per kg — was itself very low. But adding insult to injury was the various “cuts” imposed on top of this.

A scrutiny of Parbhane’s patti (trade slip) by The Indian Express revealed his total revenues from the sale of one tonne of onions at Rs 1,523.20. The total cuts even on this meagre amount added up to Rs 1,522.20. That included commission fees of Rs 91.30, hamali or labour charges of Rs 59, bharai or filling-in-bags charges of Rs 18.55, tolai or loading charges of Rs 33.30, and transport charges of Rs 1,320 (as the kutcha patti issued in Shirur was billed for delivery at Pune). Parbhane, at the end of it, was left with a net earning of Re 1: “When after the auction, the trader handed me a Re 1 coin, I was flabbergasted. Maybe, he should not have taken the trouble to pay me even that!”

Traders, however, dismiss these as one-off incidents, while claiming that delisting of F&V would ultimately hurt even farmers. “The produce brought by farmers is not uniform, which is what processors want. The APMCs are tuned to handle variety. Here, we have 50-55 varieties of vegetables and 25-30 varieties of fruits arriving on a daily basis. Such variety will disappear once delisting happens. Moreover, instead of a centralised marketplace, you’ll have small and medium vehicles carrying farm produce and creating traffic mayhem in Mumbai,” warned Rajendra Shelke, a leading onion and potato commission agent at the Vashi APMC.

Besides, the APMC system guarantees that the farmer is paid for his produce, which wouldn’t be the case if he were to sell directly? “The proposed reform looks good on paper, but it will only spell doom for the farmer and end up completely destroying the agrarian economy,” he added.

Sanjay Pansare, who represents traders at the Vashi APMC’s fruit market, justified the high commission rates on grounds that the goods being handled here were perishable and prone to quality deterioration. Only around a quarter of the produce brought to the market is eventually of the best quality; the rest falls between medium and bad. The losses borne by b on this count have to, therefore, be made up through higher commission fees. Since 2002, the Maharashtra government has been issuing marketing licenses to various entities for procuring directly from the farmgate. Besides, 34 private markets have been allowed to be set up. But despite this, an estimated 75 per cent of annual arrivals of F&V in the state still take place in APMCs. The proportions are lower at 46 per cent for cotton and 25-30 per cent in oilseeds and foodgrains.


The good part of the article is for the first time in my reading at least, has someone tried to place the other side – the benefits from traders to farmers; for too long, we have been treated to articles that focus on the low farm gate prices prevalent in India. Such an approach suffers from one major disadvantage: the bulk of purchasing happens through these regulated markets; these are an intermediary reality that cannot be wished away; they form an ecosystem within the economy, have large dependencies of families as well as business connected to them.

Any change process can only be successful when both sides of the coin are taken care of; the concerns of the traders need to be met head-on and dealt with, as, regardless of the question of compensation to farmers, they currently fulfil a market function. This is where a slow and planned change can bear results – as seen in the example above, wherein the procurement for cotton and oilseeds, foodgrains are at much lower percentages. Full marks to the Maharashtra state Government for crafting a graded transition to the newer system!

It is heartening to see Maharashtra and Delhi take the first tentative steps towards making a fair and balanced system for all; this is something needs to be taken forward in all states. Therein lies the major issue- it nationwide implementation. Sadly, I have not come across more coverage, or at least focused and concerted coverage in the media on this vital aspect. While Foreign Policy, Political brouhaha, Make In India etc find coverage and deep, informed, threadbare analysis – this is all but absent in this matter. As a net result, sporadic articles spring up in the media, and the public remains mute, unconcerned and uncaring regarding this matter. While the other initiatives will impact Urban India immediately, and Rural India through the trickle down effect over time – this will have a  much faster and potent impact, given that more than 2/3rd of India is Rural…

This is a systemic change, deep and layered; it does not have the dramatic, esoteric and visual impact of  Make In India, or Digital India or the other steps of the Government; and yet, it is equally, and in some ways more effective in ensuring the development of our nation; it is also something that the internet generation, social media, mainstream media and Urban India just do not have an interest in, which is truly sad.  Frankly, this state of affairs is a brutal indictment of Urban India

The shocking example above exposes the state of affairs – that the farmer is not getting anywhere near enough; other data and proof in the for of articles can be provided; let us take Onions as an example. How much do we pay in retail? 20/- a Kg – 30/- a Kg? At times, 40/- a Kg? How much of this should the farmer take home? Prices to farmers have even gone as low as 20 Paisa a Kg. We hear a massive hue and cry when prices shoot up – so why are the people and the media silent now? Why is there total silence on such a vital matter? Because it doesn’t impact Urban India?


The bumper harvest this year, however, has left farmers in tears with reports suggesting that prices have fallen to an all-time-low of Rs. 30 paise per kg at Madhya Pradesh’s mandi in Neemuch district. “There has been surplus onion production across the country this time, and the demand is relatively low. The farmers are badly hit as they spend at least Rs. 12 per kg in the entire process of producing the crop, excluding their labour cost,” said Rajender Sharma, member of Azadpur, Agriculture Produce Market Committee (APMC).

In Delhi, which primarily relies on these two States among a few others for onions, the situation is equally grim. At the Azadpur Mandi, the kitchen essential is being sold at Rs. 7.86 per kilo on an average. The best-quality onions are being sold at a wholesale rate of Rs. 10.5 per kg, whereas the poor-quality and the smaller ones are being bought by traders at Rs. 4.5 per kilo. The retail prices in the city range between Rs. 18 per kilo and Rs. 20 per kilo.

Did we read much of this in  the Media? And do note the difference between retail and wholesale prices; and ask yourselves some questions on tis state of affairs. Also do ask yourself is it fair that these matters take backstage to the much more visual steps that directly impact Urban India – and also ask yourself how can we change the state of affairs?

Participative Growth – The Need For A 3-Pronged Approach

Published February 14, 2016 by vishalvkale

It has been stated that Industry level growth is the key, the answer to India’s many woes, that industrialisation and its attendant advantages will ensure growth eventually percolates to all levels of society. The caveat in that line of thought is “Eventually” : just how long is eventually supposed to mean? How many lives and generations will have to suffer the pangs of poverty till that eventuality transpires? And, what do we do in the interim?
These people are equal to us, the privileged class – the ones with education and great {or good or even average} well paying jobs. They are our equals in every single way; they have the same rights as us, they have the same dreams and desires as us. The luck of birth, and the chance of education that has been provided us has ensured we live well, by the grace of God. Granted that some among the poorer classes do manage to break the shackles and grow out of poverty; but does that mean we forget the rest of them?
There is a tendency, a rather unfortunate tendency, among the educated classes to equate GDP growth and Industrialisation with the concept of solutions to poverty. That is unfortunate; granted that it is one of the factors that lead to resolution – but this path does not take the full picture into consideration. That Industrialisation is needed is a given; again, a correct observation. I dont differentiate between manufacturing or service here – the creation of options that can be filled by educated people is a needed reality, one which is not upto to speed in the current economy. But who will benefit from this Industrialisation?
The educated people – that is who. The ones with a professional college degree will get the best jobs; the ones with some basic college degree will land jobs and careers that ensures a stable decent life for them and their families; the high-schoolers will get the next level of vacancies; the rest will make do with poorly paid menial jobs and temporary jobs. Some will take advantage of become entrepreneurs, unlocking further jobs and careers for people – but entrepreneurship also generally requires education and a defined skill-set, although service sector entrepreneurship is a different ball-game altogether.
The problem is that the current generation of the poorest segments just cannot afford education for their children; so the question of them benefiting immensely {beyond labour jobs, often poorly paid} does not arise. It only increases the gap; this does not mean we dont industrialise; this does create jobs – even though they are poorly paid ones at the bottom of the pyramid. The key is get out of this vicious circle of poverty. That can only happen throughthe enabler of education, nothing else.
Industrialisation in such an atmosphere does create jobs at all skill levels, but the better jobs that can ensure a proper life are reserved for the educated, as these require certain skills. So how do the poorest and the poor break the barrier? It is manifestly infeasible. There have been jobs created – Engineers, Entrepreneurs, Doctors, Professionals, even Clerical Jobs, Service jobs – a whole new paradigm of change has happened with economic growth. That is beyond debate.  Poverty has also reduced; people have gotten better off, No one can argue with that; the evidence is there for all to see. But we cannot rest on our laurels; not when you see the remaining poor all around you.
Menial jobs for the uneducated and low clerical jobs for the less educated {upto 5-10 years schooling} have been created; these just dont pay enough to ensure a full education to the children often enough. The pace of creation of jobs has also not kept up with the demand, So how to get out of this? Change is happening; but the pace of change is slow; almost too slow. That is the main point of concern for us as a people. We need to increase the pace of change, the pace of growth – as well as ensure that it percolates to the most hapless people in our midst. Like us, they are equal citizens, and we should do far more to ensure they grow.
How do you ensure that jobs lead to development at all levels, without education? How do you ensure that education without jobs will lead to happiness? Both are recipes for trouble; that said, it is true that the latter – education without jobs – can be more harmful as it has the potential to unleash frustration among the educated unemployed. But does that mean we forget the benefits education brings, and place education on a back burner, and not on centre-stage, as the cynosure of all our efforts to modernise our nation and our economy?
What is needed is a balanced approach  – one that caters to Industrialisation, as well as a full scale war-like approach towards education. While the former is happening, the latter is not yet in the public imagination, or Government policy, judging from media space as well as action on Start-ups, Economy, FDI, GDP, Industrialisation etc. Even this two-pronged approach has its disadvantage – it leaves out all of the Agricultural sector from its ambit, where the farmers and the labourers just aren’t earning enough to ensure anything other than a basic life.
And the Rural community, where the farmers and the landless labourers are concentrated, form the bulk of India. We, the Urban Indians, are the exceptions; they are representative – as they are in a majority. High time that we Urban Indians faced upto that hard reality!
And that is yet another reason why Agriculture and its problems need to be defined properly, and solved at the earliest; that can unlock earning potential faster than any other avenue or venture available to us as a people. That will also tend to reverse the trendline we saw in my previous article – with rising imports increasingly becoming a reality

We need to enable the government to allocate more attention to the development of Agriculture than it currently does; that can only happen if the voice of the people reaches the government in a democratic fashion, in Media articles, through people’s letters, small {tiny} forums like this blog and its readers and so on and so forth. Urban India needs to realise and understand that improving Agriculture will lead to improvement of the Urban scenario as well, that it is far more important to elevate our villages than it is to build Urban Infrastructure, given the paucity of resources we have! What these initiatives can be forms the next part of this series on participative growth…

Rural India : How Can We Ensure Participative Growth?

Published February 7, 2016 by vishalvkale

Continuing the series of thoughts on farming, let us  look at some real examples of human tragedy – not suicide, but examples of poverty in farming and rural India to put things in perspective, and look at the scale of the problems facing us as a nation. We in Urban India wax eloquent on industry, technology developments; the question is how to give amelioration in the rural tracts of the country? How can we ensure participative growth? I am not looking at the economic argument of trickle down versus inclusive growth; I am looking at the human side of things – which, in my opinion, is the only way to look at things.

That is a question that requires an understanding of the scale and nature of the problem confronting us. In a previous article, I had listed the problems facing agriculture; and had also analysed profitability from farming Wheat and Paddy for a period of seven years. Those articles list a series of research reports that provide hard data on the abysmal status of the farming community as a general statement;  specifically the Small and Marginal Farmers {and the landless}

To quote from that article : “Now take a look at the absolute numbers of profit that are coming out. It is ranging from a loss of 1400 Rs per crop, to a profit of 9700 approximately per crop. What can a family do in that meagre amount? “ That is one aspect of the problem; the second aspect is the number of Small and Marginal Farmers in India, with holdings of less than 2Ha {avg holding size is 1.41Ha approximately, from memory} – these number more than 70% of total farm holdings, which are in the region of 116 Million, and might even be 80%+ of holdings. We are looking at a huge number:  90 Million Families. Add to that landless agricultural labour, and the reality stares at you in its stark and naked truth : We are talking of 100s of Millions of people.

You might state – with some degree of accuracy – that industrial development will create opportunities and jobs, that slow change will trickle down to all levels. There are two major objections to this from a human perspective. The first challenge is how will uneducated people, people with limited skills outside farming take true advantage of industrial growth? And are the opportunity creations in the rural areas – or are they in the cities? Are we capable of dealing with increasing inward migration and pressure on the cities, or are we creating urban slums? Will the displaced labour get an improved life?

Second level of the problem in this approach is, trickle down takes place over a period of time; that it is effective in eradicating poverty over time is not in debate, under the proper set of conditions. What happens to the people in the meantime? That is why a large level of intervention and help is required by these people from the State as well as the Haves of society. This is so that they can live a decent life, and enable to them to provide health and education to their children. These are the “proper set of circumstances” I am referring to – are we, as a people, truly and really focussing on education and on health?

How can people move from Farming to jobs without a decent education and a functioning and delivering health scenario? Without access to affordable health services of a standard, and access to affordable schooling of a proper education standard that helps in developing the demographic dividend we are so fond of extolling? Thus, if you have focus on Urban India, on Infrastructure {which also benefits rural India}, without an adequate focus on education and health – where is the guarantee that development will percolate faster than what is the current rate?

Given the vagaries of farming in India as a profession and its attendant challenges {my post}, it is a requirement that a helping hand be extended to the farming community for us as a people; Urban Indians would do well to understand that rural India and farmers in particular are facing a series of challenges that have led to serious problems and losses for them as a community, especially in the immediately preceding few years, as covered in my previous article.

The challenge is misunderstood to be one of creating jobs and opportunities – it is also one of creating the right conditions that will enable the rural community to actively partake in developmental opportunities cutting across income lines. That means education & a decent livelihood for their current status that can enable them to attend school. With the terrifyingly low income levels that we have seen, how can a father ensure a decent education and health to his children  and his family?

Are we, as a nation, giving adequate attention to education and to health? Ask that question of yourselves…

To understand,  read this hard hitting article with live examples of the reality of Rural India : http://indianexpress.com/article/india/india-news-india/bundelkhand-this-year-nothing-has-been-sown/

AKASH, 12
Akash says he stayed back because he did not want to miss school. “I don’t want to be a labourer. I want to get a government job,” he smiles. But for the Class VI student, life has changed. His grandfather is 65, and the 12-year-old must sweep the floor, prepare the hearth in the kitchen with cowdung cakes, and often make chapatis before he leaves for school at 8 am. “I know how to knead atta,” he says. “Today there were no vegetables, so we made chutney.” Chaudhary Sundar Singh Inter-College where he studies is about 10 km away, and he cycles there. When he returns at 4 pm, the chapatis from the morning serve as meal. “This year nothing has been sown, increasing the migration to other states,” says pradhan Raju Dixit, adding that many in Mahoba have also disowned their cattle…

JAVITRI, 18
Just before Diwali last year, trucks queued up outside Chichara village on NH 86, just like the past few years. Among the villagers who left on it for brick kilns of Rajasthan were parents of 18-year-old Javitri. Last year the crops on their one-bigha land were damaged by rains, and this time, the fields were not sown because of lack of water. Village pradhan Narendra says nearly 30 per cent of the residents of Chichara, that has a population of about 3,500, have left in search of work. Villagers say earlier only the poor migrated, now even landowning communities do. “Even Thakurs and Brahmins have left,” says Dinesh Dwivedi.  Javitri, who dropped out of school in 2014 after Class XI as her family couldn’t afford her studies, lives alone in the family’s two-room home now. Her aunt and uncle live next door…
DHALCHAND PATEL, 46
Dhalchand Patel’s father Chaturbhuj had taken a loan of Rs 2 lakh using his Kisan credit card four years ago. The Patels own 10 acres in Ghutai village of Mahoba. Chaturbhuj died in summer last year, leaving behind a family of six and the unpaid loan. On December 21, Dhalchand, 46, was found dead on a railway track nearby. His family members say he had got a notice to attend a Lok Adalat in connection with the loan. “The night before his death, he spoke to me about the loan. He was worried,” says Pratap Singh, Dhalchand’s uncle and the village pradhan

RAM BABU UPADHYAY, 40
In Kalipahadi village near Mahoba town, Ram Babu Upadhyay, 40, had been struggling to irrigate his eight bigha land, on which he had sown wheat. On January 21, while discussing his problem, Upadhyay fainted, and died before reaching hospital. “The wheat crop is our only hope,” says his widow Pinki, holding their two-year-old son Manav. Most of the tubewells have dried up here, with handpumps only providing enough water for drinking. Most of the seven rivers in Mahoba are also dry. The biggest irrigation project, Arjun Sahayak Pariyojana, inaugurated in 2009, is still not complete. The budget was recently doubled to around Rs 1,600 crore. The Rs 7,266-crore Bundelkhand Package, also announced in 2009, kept aside Rs 3,506 crore for the UP districts. It has proved ineffectual in this round of droughts

RAMESHWAR PRASAD RAJPUT , 59
Wearing a torn shirt and trousers, Rajput says his condition has only worsened since. “Both my sons work as labourers. I work as a security guard in Surat. My daughter-in-law’s two deliveries cost me Rs 80,000, and I had to pawn my four bighas..

Each case a testament of the status of Rural India, although these cases are from Bundelkhand, They, each of them, give an indication of the apathy in our society, of societal ills, of lack of access to education, and of distress. The cases tell of societal pressure, of failure of crops, of migration, of deep distress… how can these people or their wards partake in development that we are so fond of extolling? That is why, these people need a helping hand, and that is why Governments regardless of party lines give that helping hand. They need it, they need our help…


Not everything in life can be a simple profit-and-loss statement. Some things are beyond that, the call of humanity. Rather than question the aid given to them without suggesting alternative solutions, let us introspect as to how can we turn around the situation? How can we ensure participative growth? It is easy to state that curtail this and that; rather than do that,  the question should be, is and remains : how can we ensure skills, education, a decent life to our fellow citizens? 

Farming : Profitability of farming Wheat and Paddy over 7 years

Published June 28, 2015 by vishalvkale


In the previous articles on the farming scene in India, we saw the basics of farming, and a look at the economics of Paddy in a few states in India. In this article, I shall go deeper, and add another crop : Wheat, as usual with data. The assumptions remain the same as they were in the previous article on the subject, which can be found here : INDIAN FARMERS : A LOOK AT ROUGH ESTIMATES OF PROFITS



In the previous article, we looked at the returns from paddy; let me present another view from the same data set : 

The chart above is average earning from Paddy crop calculated on C2 Cost Concept. The C2 Cost concept includes cost of seeds, fertilizers, manure, human labour including family and hired labour, animal labour, machine labour both hired and owned, insecticides, irrigation charges, interest on working capital, rental value of owned land, rent paid for leaded-in land, land revenue cess and taxes, depreciation and interest on fixed capital. 
This is called the c2 concept; there is another concept – the c3 concept which includes value of managerial input of the farmer. These costs have not been accounted for. It can be straightaway seen that if you add 10% to the costs, profitability of the Farm as a business enterprise takes a nose dive. And also note the states for which the data is being collated, and the returns from the less developed states. 
Furthermore, now I ask all of you to compare with a  running business enterprise, and try and identify expenses that we incur while running the business which are allowed as deductibles. This last bit may not be acceptable anywhere, but you cannot deny that a business enterprise is allowed deductibles on several and sundry items as costs incurred in running the business apart from the expenses listed above; it is easy to note that these costs are not accounted for here; it is also a given that other costs would perforce be incurred. Lastly note that the trendline pf the average on all states in both cases over 7-8 years from 1996-97 is either flat, or decreasing; in one chart I have presented the trendline – that for Paddy. 
Now please remember these are numbers collated for the entire farming universe, which includes Small, Medium and Large farmers. So it is also a given that these returns, such as they are, will not be enjoyed by every farmer, and will be skewed in one side or the other. Small farmers and Medium farmers will have a different calculation, the numbers for which are not readily available. Having said that, there are other indicators from which we can draw a parallel – like the per hour costs on various items, or the various reports on several aspects of SM Farmers in India which give several pointers and more. But more on that later. 

Now take a look at the absolute numbers of profit that are coming out. It is ranging from a loss of 1400 Rs per crop, to a profit of 9700 approximately per crop. What can a family do in that meagre amount? Take a look at other constituent data, like wages charged. The wages for AP for Paddy ranged from 2491 – 3097 per crop. Another 7000-9000 was rental value or rent paid per crop. These numbers are per hectare, and are similar across all states I have taken in the calculation. 

What can a family do in 12000 – 20000 per 4 or 5 months, even if we consider gross receipts, and not account for other expenses? Does making profit simply mean cash flow profit, and can we then jump to the conclusion that all is well with farming given they register a net cash flow? What about standard of living? Look at the wages being charged to account, and think of what you charge to accounts in business? Or just take a look at it from a simple living perspective and family needs perspective! Are these people not entitled to improvement and growth? We in business pay our employees handsome salaries, give perks, all comforts, expenses; we register a net profit after deduction of a whole list of expenses which are chargeable to running a business. Can we say the same for the farming community of India basis the data presented? 


And remember this is data from all farm sizes. The question then arises what is the dimension of the farming landscape in India? These people stay on the farm or near it; Agriculture forms a principal part of their business; they are people with no other skill sets. Even in the best case scenario, the state of the small and marginal farmer is evident from these hard numbers, which are based on national averages, including returns from large holdings, which will perforce be different. Lastly, this data is from 2003-2004; we shall subsequently tabulate data from 2014, and examine- or try to get a rough estimate, of the progress in the past 10 years – this will give us a rough and ready estimate of the development of farming scenario in the past decade
This is the reality of farming in India… and the moment we start delving into the number even deeper, further and more serious issues begin to emerge. Given that I have taken data from 1996-2004, let us examine land holdings in India from the same period, and establish a bird’s-eye view of the Indian Agricultural scenario, before we move into the policy and political realm for a further analysis.
For this, we can refer the report “A Special Programme For Small And Marginal Farmers  – National Commission For Enterprises In The Unorganised Sector“; the pie chart  I have created for easy readability. These give you a precise idea of who is representative of the farming scene in India : the small and marginal farmer, or the large farmer?


In the next article, we shall look at these farmers in more detail : what constitutes this segment, what do they grow, what do they earn, what are the challenges they face, what is their economic output and contribution to the nation, what is their awareness level on various aspects, what are their earnings and what are their requirements.



INDIAN FARMERS : A LOOK AT ROUGH ESTIMATES OF PROFITS

Published June 19, 2015 by vishalvkale



INDIAN FARMERS : A LOOK AT PROFITS

Most pink papers and white papers in mainstream media are usually habitual of carrying informed, and reasonably accurate articles and analyses on Agriculture Taxation, Cost of Power etc; a few also carry articles on the scenario of farming distress, usually focusing on suicides – an extreme step with a multitude of causes – or some other topical aspect, like seasonal losses etc. Few articles that extol taxation and power etc attempt to make a numerical analyses of farming and its profits. 


 The discourse in Urban India and Urban Indians focuses on taxation and other issues on one side, and suicides and farming distress on the other. Little attempt is made to place in front of the public the reality of the farming scene in India; in the previous article we looked at a simplified look at the entirety of the issues facing Indian Agriculture. Before we move deeper into the series, let us now place things in perspective, and go where few people have ventured: profitability of Farming in India, basis data and research that is publicly available. 


In presenting this analysis, I have used and based my calculations on authentic research from the internet, usually from recognized bodies, and have stayed away from any assumptions. The one assumption I have taken will be clearly mentioned as such, and has been further cross-verified with MSPs of the relevant period. While MSPs do not represent the entire market – as we shall see later in future articles – taken together with the research we can get an excellent bird’s eye view of the reality. 


The analysis is presented for costs and return from Paddy, for the years 1996-2003 released in 2007; the numbers have been sourced from Cost of Cultivation of Principal Crops in India, a report generated by the Ministry of Agriculture. Further on in the series, we shall look at numbers from contemporary India, reports of 2012-2014, and that is what shall give us a firmer idea. Further, the most detailed reports I have found are from 2003-2007 period; if updated numbers are available, readers are requested to update me with the same. 


Note : 

The base report used is this one : http://eands.dacnet.nic.in/costofcultivation.pdf for reasons that have been included later on in the article. I will also refer many other researches, on other cost concepts, as well as NSSO 59th Round and 70th Round Research Reports in this series, but that is in subsequent articles

I have presented data for one crop : Paddy, and from 12 states for which  the data has been presented. I have not presented data for Chhattisgarh, Uttarakhand and Jharkhand for which data was present for only one or two years. 

This data presented here is my analysis; it is not present in this form in the research. On the same page in the referenced material, the value of produce & by product is present, as well as the cost of cultivation. I have brought them together and tried to derive some rough estimate of profit. This is of course a rough estimate, given that the research I have referenced clearly states that some input costs are from family estimates. From this base data, I have presented my charts, as well as presented the base data. 

Having said that, the rigorous calculation and imputation methods give a certain level of authenticity to the data : like taking post-harvest produce prices, or prices of inputs in local village, minimum wages, prevailing rent in the village etc

The one assumption taken here is the “Value” of product; this assumption is predicated upon the clarification on page no 7 of the research report “Cost of Cultivation of Principal Crops in India – 2007” from the Directorate of Economics and Statistics, Department of Agriculture and Cooperation, Ministry of Agriculture. The report states, and I quote : Main product & by- Imputed on the basis of post-harvest product prices prevailing in the selected villages.

I have tried to validate by taking data on yield per hectare and using MSP as a check for the veracity of my presentation. Despite this, this article remains indicative in nature; readers are requested not to derive too much from this. The objective  of this calculation is clearly mentioned in the next point.

This is just an indicative exercise, undertaken with  two objectives : first is the presentation of the reality of Farming when taken as a business enterprise, and secondly, the tackling of several Urban myths on Farming, and leading upto my third article, which shall go deeper into this

I have used C2 {revised} costs : that is, I have taken into consideration all items and components of cost, not just those that are paid out. The logic for taking this as a base is explained in the conclusion

All calculations are on a per hectare basis


Below is the chart of Value of Produce minus Cost {A rough estimate of net profit – Given the assumptions, let us also validate the same from others sources to see the accuracy of our presentation} : 

State
1996-97
1997-98
1998-99
1999-2000
2000-01
2001-02
2002-03
2003-04
Andhra Pradesh
1079
(457)
2975
1304
518
(7)
3186
4188
Assam
434
1390
2597
1844
(216)
(658)
(806)
(1080)
Bihar
918
1091
1848
712
(1950)
(876)
(1387)
(1263)
Haryana
1438
1842
2494
2069
6708
4641
989
2364
Kerala
0
(1515)
(61)
1923
1212
1452
1453
(1752)
Madhya Pradesh
779
(550)
(953)
(126)
(3843)
(2205)
(3477)
(906)
Karnataka
0
0
0
8787
2636
1950
4925
1798
Orissa
1014
1023
0
(370)
(18)
(375)
(3824)
(1516)
Punjab
2936
4912
2787
7184
7950
10239
4327
9881
Tamil Nadu
0
0
4642
1143
2073
317
3172
1069
Uttar Pradesh
3259
917
1250
1910
356
(203)
(1985)
1554
West Bengal
2160
1162
2891
(236)
(3385)
(3304)
(5539)
(3220)




To verify, let us take the yield per hectare data from the same research, and access Minimum Support Prices of Paddy from other sources {This one from RBI and This one }. Multiplying the two will give us a rough estimate of the value of the produce per hectare based on yield and solid documented and verifiable data; not field estimates. We can then subtract the resultant value of the farm produce from the value of the rough estimate above, to get an idea whether the key component : value of the produce, is anywhere near accurate. The resultant data table is tabulated below :

State
1996-97
1997-98
1998-99
1999-2000
2000-01
2001-02
2002-03
2003-04
Andhra Pradesh
4226.8
(2563.6)
(4577.0)
(3862.5)
(1807.0)
(2449.9)
(4078.0)
(3212.0)
Assam
1066.2
(1758.9)
(2926.6)
(1778.0)
607.7
808.5
(14629.6)
1064.5
Bihar
2169.6
(1535.9)
(1842.4)
(1439.2)
1076.8
1588.8
4513.8
1368.0
Haryana
3552.8
(4406.9)
(6275.6)
(5436.5)
(8936.6)
(7546.7)
(13790.7)
(9105.5)
Kerala
0.0
(7690.1)
(9711.1)
(9637.2)
(8630.4)
(7680.0)
5264.2
(8208.3)
Madhya Pradesh
2672.0
(1754.9)
(1842.6)
(2350.0)
(1290.0)
(1452.6)
(26893.3)
(591.3)
Karnataka
0.0
0.0
0.0
(10422.8)
(4456.2)
(8207.6)
(10859.1)
(7984.0)
Orissa
2195.5
(921.5)
0.0
(2400.3)
(1765.0)
473.2
(2928.6)
793.6
Punjab
1534.5
(2023.6)
(1474.7)
(1539.9)
(930.3)
(2292.1)
12335.6
(3042.1)
Tamil Nadu
0.0
0.0
(7844.5)
(6950.7)
(5165.2)
(5056.8)
24205.1
(6484.6)
Uttar Pradesh
1632.1
(146.7)
(485.1)
(58.2)
1682.8
1844.0
16382.3
907.5
West Bengal
4953.3
(4853.9)
(7974.7)
(3710.3)
(766.1)
228.6
18862.7
(872.9)

In most cases, we can see that the resultant value based on government declared data of prices is lower {at times much lower} than the produce value used in our calculation. That can only mean that the value assumption – that of the value of the farm produce – is reasonably usable as an initial level estimate that can help as a guide towards understanding the concept farming as a business enterprise. Having said that, let us not read too much into this : this requires deeper study; these numbers are only, as I have mentioned above, indicative of a reality which I shall look at in detail later on in this research I am undertaking



THE CONCLUSION
Why should we take into account only those costs which the farmers are paying of pocket for Agriculture, while allowing all costs – including those lovely 5-star lunches, Promoter / Investor Salaries etc as deductions for Business? The same concept needs to be used for farmers as well! For the farmer, the farm is his office, his business; any expenses he incurs while farming- his occupation – should be deductible. If we allow Owner and Promoter Salaries as deductibles, business lunches gifts etc as deductibles for arriving at the profitability of a business, the same concept applies to farming. The reason is that these expenses are incurred while conducting the business. 


The above data clearly indicates that farmers as a whole, as a community, may not be making money, or at least a decent ROI – and this is even in the most advanced of states, like the case of Punjab. At least not when viewed as a business enterprise. And yet, this does not find mention in common articles in pink media {economic news} when analyzing taxation or power charges, or among some common Urban Indians. A deeper study, to be taken later, will reveal a lot more, and on both sides of the debate. This presentation is at best a rough estimate, and indicates the issues.  But this study does indicate the need of introspection for us as a people. Remember – these are the people who manufacture the food we eat; yes : Manufacture. Their Farm Factories produce the end product that allows us to live!

FARMER DISTRESS IN INDIA

Published June 15, 2015 by vishalvkale

The situation in Indian Agriculture, and particularly farmer distress, is increasingly getting the focus, reaching centre stage in The Media and public discourse; at long last, Agriculture is showing signs of getting the attention it richly deserves; for too long we Urban Indians have ignored Indian Agriculture. The sad part is, some {though not all} articles and write-ups on the farmer scene in India do not cover the full reality, and are unaware of the complete list of factors. Furthermore, basis my interactions online and offline, the majority of Urban Indians seem to be totally disconnected with the reality of Indian Agriculture. These articles are an attempt to tell the real story – based not on opinion, but on solid research; full bibliography can be within each article – as well as a full bibliography in the last article of the series.

The common discourse centers around GM Crops, or Irrigation, or Farmgate Prices; rare is the article that takes a holistic view of the full scenario. The impression it creates is one-sided, leading to heated debates based on assumptions & fiction rather than science and fact. This is not a matter of debate insofaras the causes of distress are concerned; the causes are exceptionally well-studied and presented in innumerable authentic research papers in several august bodies. Fact of the matter is that Irrigation, or GM, or anything else is not a direct cause of distress; these are among several and more important causative factors. Irrigation, to take but one example,  has a massive positive impetus on yield – true, but the causes of distress in India have precisely nothing to directly connected with irrigation. The causes of Low Productivity, equally, have only a limited connect with Irrigation, which is only a single parameter among several more important parameters that lead to higher yield

Among the real problems of Indian Agriculture are the following :
ü Low penetration of high-yield Hybrid varieties, proper varieties attuned to Indian Climate; varieties for rainfed . irrigated, saline, alkaline, loamy soil etc etc; their awareness among farmers and their availability
ü Re-planting of Seeds, right seeds for right areas
ü Unscientific Agricultural Techniques {absolutely no relation with technology, which is frankly immaterial insofaras this problem is concerned; mechanization has little direct relation with productivity, which is a straight function of inputs – Soil, Water, Nutrients, Agronomical Techniques, Air and Sunlight. Period.}. This spans crop rotation as well as other agronomical approaches.
ü Pest Management : Again, I did not state Insecticides; they are but one part of pest management, which has more to do with Agronomical and Mechanical Techniques than technology and Chemicals alone.
ü Irrigation, and its judicious use [For the unaware : you dont just irrigate. There is a time, place and volume of water. There is water quality- its dissolved nutrients & minerals, pH reaction etc which can be critical differentiators… and so on and so forth]
ü Quality of Soil in some tracts of India – For ex, the problem of Salination & sub-soil drainage of Soil in large tracts of Punjab&Haryana as well as Gujarat
ü Water Quality, Salinity / Alkalinity, Dissolved Minerals, Effluents
ü Unbalanced [In fact, Soil Salinity in some parts can be traced to Chemical Fertilization; this is the subject of several researches, which I shall share in my article For the unaware : Soil isnt just soil. You have to match pH, Structure, Aeration, Nutrients, etc with crop requirements. And Saline soil is virtually useless]
ü Low Price Realisation at Farm Gate due to APMC and other politico-econo-legal issues which have no easy solution
ü Losses of produce in transit from Farm to Market, in the fields after harvest
ü Lack of access to Agricultural Credit
Not one of these problems can  be ignored; neither are all of them applicable everywhere; India is geographically diverse; the soil & water are different in various parts, as are temperature and other vital factors. These factors, taken together, are what are responsible for the distress; having said that, it is typically a sub-set that is the key problem in each area – like Maharashtra, where the seed factor is or seems to be important {GM Crops}; or areas of Punjab and Haryana, where Salinity Ingress will take precedence, and reach  the subset of factors that are responsible.

The other bugbear is the small size of land holdings – where again, the public discourse is inaccurate. While small holdings are a problem insofaras profitability is concerned {we shall look at this in detail later on, in another article – with data tables and productivity, costs etc} – their yield performance is as on data impeccable. This has many learnings, as we shall see later. The reality is the exact reverse, as authentic data from All India proves in no uncertain terms : SM Farmers are actually more productive per unit of land than Semi-Large and Large Farmers.

SM Farmers contribute around 50% of national output varying from 19.3% to 86.9% between states, and are known to be more productive per hectare, I also refer you to the 59th Round on Situation Assessment of Farmers Survey 2003 , and the 70th Edition of the same which empirically established this. The value of output per hectare was 14754 for Marginal Farmers, 13001 per hectare for small farmers and a meagre 11333 for Large and Semi Large farmers in the 2003 report – we shall take a look at the 2014 numbers in the next article.

Fact of the matter is that it is an unassailable fact that Small and Marginal  farmers are more productive; they contribute to 41-50% of national output, while holding only 33-37% of the land, as researches across the world – IGIDR, FAO and many others have proven beyond even a shade of doubt across the previous decades. The questions then arise is that firstly, has anything changed in the latest edition – the 70th edition of the same survey? And even more important : why cant larger farms be more productive than smaller farms? What can then be done to alleviate the problems plaguing Indian Agriculture and in particular the rising farmer distress?

Agricultural productivity requires certain inputs, just the same as any other science does. What I have done is merely listed the basics of Agricultural Science, admixed it with information about the real scenario in India basis research conducted across several universities and government bodies over the past 60 years. This is an exceedingly well studied scenario, and is pretty much beyond debate. Let me take just one example not in the common discourse : seeds.

It is a known fact that local seeds still command 50-60% share, and that hybrid varieties, which are more resilient as well as return better yields are not fully penetrated due to various reasons. This is proven by another research of 2012 origin from IGIDR Mumbai. The same can be found in sources as far apart as an Exim Bank report of June 2012 echoes the same, showing a penetration of between 2- 50% in staples. This is important because Hybrids demand less inputs, give greater yield and are far more resilient, leading to increased productivity. Furthermore, there is also the sceptre of reuse of Hybrid Seeds, This you cannot do; Hybrids are F1 seeds, in which yield potential reduces dramatically from F2 onwards; this is a known endemic problem to India.

As can be seen, this is no simple matter; this requires an informed debate. I have just listed the basics in totality here : if any journalist is reading this : my only request is to present the full story to Urban Indians, who remain singularly ill-informed of the scenario in Indian Agriculture. Moving on, the next article will attempt to go deeper, and explain the farming community in terms of Small 7 Marginal Farmers, Medium and Large Farmers – just the same as Industry is organized, or SME. Same applies to farming, and just as in business, the challenges and requirements are bound to be different…