{"id":26882,"date":"2022-03-11T12:48:07","date_gmt":"2022-03-11T07:18:07","guid":{"rendered":"https:\/\/plyinsight.com\/?p=26882"},"modified":"2022-03-11T12:48:07","modified_gmt":"2022-03-11T07:18:07","slug":"our-farmers-in-need-of-a-new-deal","status":"publish","type":"post","link":"https:\/\/plyinsight.com\/hi\/our-farmers-in-need-of-a-new-deal\/","title":{"rendered":"\u2018Our farmers in need of a new deal&#8217;"},"content":{"rendered":"<p><strong>Much of the agricultural policies in the past have focused on production. The three now repealed Acts were reforms on the marketing side. The narrative was created that the laws were not in the interests of the farmers. Because of this they were with-drawn. Now that the laws have been repealed, any major marketing reforms are out of the question. It is unthinkable that any government will touch them in the years to come. If the demand for legislation on minimum support price (MSP) is accepted, it will be all the more regressive.<\/strong><\/p>\n<p><strong>It is unfortunate that instead of investing in research and development in agriculture and extension activities, which is the right way to go, our political system and democracy move by throwing more and more doles or subsidies.<\/strong><\/p>\n<p>It was in 2013 that the UPA government, in its last-ditch battle to appease consumers, enacted the National Food Security Act (NFSA) by giving them rice and wheat at R3 and R2 per kg, respectively, while the same rice costs the government now something around R40 a kg. there is massive leakage as the system is geared towards that.<\/p>\n<p>When the multidimensional poverty index shows that less than 30 per cent of the country&#8217;s population is poor, giving cheap food to almost 67 per cent of the people defies logic.<\/p>\n<p>So either you reduce the coverage under the NFSA or raise the issue price (the rate at which grains are sold at ration shops) and link it to the economic cost of wheat and rice\u2014so that at least half the cost is recovered.<\/p>\n<p>On top of that you have the fertilizer subsidies, the prices of which have gone up in international markets. It is a political hot potato because of the mood of the farming lobby in the government. Under both these heads, we feel there will be immense pressure on the government in the Budget. They may not do much for fertilizer subsidies, but in food subsidies there is scope for curtailing them.<\/p>\n<p>It is not that the farmers don&#8217;t need a new deal. But the instruments being adopted for them are old. The way to go is income support and direct benefit transfer and not market-distorting subsidies.<\/p>\n<p>It is not turnaround, but we feel this is where the government loses credibility. Problem is that the people who are running the show don&#8217;t understand how market economies function. At the drop of a hat, all sorts of controls are imposed. If with a temporary rise in prices you take steps like banning futures and imposing stock limits, it shows hollowness in policy making.<\/p>\n<p>Our elections are nothing but an exercise in populism. The fact of the matter is that it is our taxpayers&#8217; money that is being thrown away as doles. All these should be banned; nobody should be allowed to give any freebies ahead of polls. 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