What India's farmers really think of Modi's budget game changer

Farming is just not worth it for many of the millions dependent on it. But they are left with little choice. This stark reality, along with a worrying paucity of jobs, will weigh heavily on the upcoming general elections. Growth in agriculture trails that of the economy and agriculture’s share in the national output has declined drastically over time — from around 50% in the early 1950s to 17% in 2017-18.But the ruling Bharatiya Janata Party hopes to endear itself to the agrarian community with its latest salvo. In a widely anticipated move, interim finance minister Piyush Goyal, in his budget speech on February 1, said 120 million farmers with less than five acres each, who account for over 85% of India’s farm holdings, would get Rs 6,000 each annually.Telangana was the first to announce a similar income support scheme a year ago, followed recently by Odisha and Jharkhand. The state initiatives are more generous and expansive in their coverage than the central scheme. Telangana’s largesse helped chief minister K Chandrasekhar Rao post a resounding win in the recent assembly election. Will the Centre’s initiative similarly work in Prime Minister Narendra Modi’s favour in the parliamentary election? In the days before the Budget, ET Magazine writers travelled to eight states, three each of which are ruled by the BJP and the Congress, either alone or with allies, and two by regional heavyweights. These states are spread across north, central, west, east and south India, and while the villages we visited cannot be taken to be representative of an agrarian economy as diverse as ours, they certainly give us a peek into how grave the farm crisis is.Problems range from lack of irrigation in Saurashtra in Gujarat to stray cattle in Bundelkhand in Uttar Pradesh to delays in availing the farm loan waiver in Karnataka’s Raichur district. And the lack of remunerative prices is a recurring theme among the potato farmers near Amritsar and the onion farmers in western Maharashtra, where sugarcane growers have also been protesting to expedite payment of dues they are owed by sugar mills. The market prices of several crops are lower than the government-determined minimum support price.After the budget announcement, ET Magazine called up the farmers to know their reaction to the government’s income support scheme. Some of them feel that Rs 6,000 every year may not amount to much, but the jury is still very much out on the scheme’s impact on the election outcome.Gujarat: Drying land, waning vocationBy G SeetharamanYou will not find anyone below the age of 40 in the fields. It’s only people like us who do farming,” says Vithalbhai Dhaduk, a 44-year-old cotton farmer in Jetput, a village 60 km south of Rajkot, Gujarat’s fourth largest city. Tall and clad in a windcheater, and chewing tobacco and areca nut without a break, Dhaduk says he cannot even get his two sons — one has just finished college and the other is in high school — to help him out occasionally on his 7.5 acre farm. He does not blame them.“No girl wants to marry a farmer.”“It is the same with my two sons,” says Janakbhai Gondalia, seated next to Dhaduk in a field. The 52-year-old farmer abandons his reserved disposition when the discussion veers towards the problems farmers face in the area. Dhaduk and Gondalia list availability of water as their top priority, followed by remunerative crop prices. “We just earn enough to cover our expenses,” says Gondalia, who spent Rs 1.3 lakh in 2018 to grow cotton and groundnut on under 2.5 acres each. 67812482 Gujarat is the country’s top producer of groundnut and cotton. The state government procures the crops from farmers. Dhaduk’s village, Pithadiya, is in the Jetpur administrative block of Rajkot district, one of the 11 in Saurashtra, the teapotshaped region that gave the BJP a scare in the 2017 state elections. The party’s tally in Saurashtra fell from 30 (of 48 seats) in the 2012 elections to 19 in 2017, while the Congress won 28 seats, up 13 in 2012. The loss was ascribed to acute farm distress, said to be one of the reasons behind the Patidar movement for reservation in government jobs and education. BJP managed to win only 99 seats (of 182) in the state, down from 115 seats in 2012.A journey through Pithadiya and neighbouring villages repeatedly throws up one visual — occasional narrow strips of cultivation sandwiched between expanses of barren fields. The villages are part of the groundnut-cotton belt of Saurashtra, a semi-arid region prone to drought.Gondalia bemoans the halving of cotton yields in the past four years due to pink bollworm attacks and poor rains. He says the minimum support prices of cotton and groundnut should be higher than the current Rs 5,150-5,450 and Rs 5,000 a quintal, respectively. Dhaduk adds a farmer is lucky if he makes Rs 5,000-8,000 a month.So what does Dhaduk make of the budget proposal to give Rs 6,000 a year to 120 million farmers? “We don’t need any schemes. We are not beggars. 67814424 We just need water and the right prices.” Since the scheme covers only farmers with less than 5 acres, Dhaduk is not be eligible. Gondalia is, but he is not impressed either: “Of what use is Rs 6,000? A farm labourer charges Rs 300 a day, so Rs 6,000 won’t be enough to even hire him for a month.”Most of Pithadiya’s farmers depend on wells to water their fields. When the monsoon plays truant, as it did last year, the farmers are left high and dry. After harvesting his cotton, Dhaduk has not been able to plant onion or garlic or cumin, usually grown around this time of the year, simply because there is no water. 67811968 Around 47% of Gujarat’s farmlands are irrigated, against the national average of 48.6%, according to 2014-15 data from the agriculture ministry. Saurashtra is banking on the Rs 12,000 crore Saurashtra-Narmada Avataran Irrigation Yojana, supposed to irrigate more than a million acres by diverting floodwaters from the Sardar Sarovar Dam to 115 reservoirs. It takes years for such projects to be set up, leave alone to assess their impact.Telangana: Advantage LandholdersBy Shantanu Nandan SharmaSoon after B Bagayya retired from a blue collar job, he bought two acres of land in Toopran near Hyderabad for paddy cultivation. Today, he wishes he should have bought more land while he had a job. The reason? Farming is giving him good returns on investment. 67811994 Here is Bagayya’s farm economics: Every acre fetches him Rs 1 lakh after subtracting input cost — fertiliser, irrigation, hiring of tractor and labour. And on top of it, he receives Rs 8,000 per acre per year under Telangana government’s Rythu Bandhu, a farmers’ investment support scheme introduced ahead of the Assembly elections in December last year. “I felt low when I retired. Today, I’m enjoying under the open sky rather than work in the coffee processing unit,” says Bagayya, wearing a shirt with logo of Tata Coffee, where he worked as a labourer for three decades. “I wish I bought a couple of acres more when I was still in service.” For example, had he owned 20 acres instead of two, he would have received Rs 1.6 lakh annually instead of Rs 16,000 under the state scheme, which has been widely criticised as being pro-rich, as more landholding means more handouts. But Bagayya is not complaining. He likes riding his Honda Activa to his field every day and enjoy his lunch sitting in his paddy field. 67812025 Earlier this week, ET Magazine met this retiree-turned-farmer on a field visit to two districts of Telangana — Medak and Kamareddy — a belt of rice, maize and sugarcane crops — to understand why Rythu Bandhu, a scheme that appears to have inspired the Centre that announced in the interim budget a payment of Rs 6,000 per farmer family with a landholding of two hectares (about 5 acres) or less. The Centre will transfer one-third of the amount to about 12 crore such farmers by March 31, weeks before the first phase of polling for the Lok Sabha election. “I voted for the TRS (Telangana Rashtra Samithi) after I received Rs 20,000 for my two and half acres,” says K Narayana, a 70-year-old farmer from Kistapur village in Medak. Narayana says he also makes some extra money by brokering at a weekly buffalo market. 67812042 Incidentally for chief minister K Chandrashekar Rao, the Rythu Bandhu scheme, which is believed to have helped his party return to power with 88 seats out of 119, was not his first choice. Five years ago, before assembly elections in the newly-formed state, Rao had promised loan waiver of upto Rs 1 lakh per farmer. But when TRS won, Rao was confronted with a harsh reality. The implementation of his poll promise required Rs 17,600 crore or 18% of the state’s budget. His cabinet then took a call to distribute the loan waiver payment over four years. But Rao felt loan waivers alone won’t not be enough to keep the state’s 57 lakh farmers happy. So in 2017, the government updated land titles on mission mode after announcing Rythu Bandhu. By November 2017, 54 lakh farmers, 86% of them owning less than five acres, received Rs 4,000 per acre or half the yearly amount, merely days before polling. But three lakh farmers in the state — like S Bomayya, 66, and A Balareddy, 48, of Bhiknoor of Kamareddy district who this writer had met — are still out of the scheme. Their payments are stuck either due to disputes over their land deeds or over the delay in transfer of ownership of land from their fathers. The Central government’s new farm income support scheme with an allocation of Rs 75,000 crore may face similar challenges.Maharashtra: Bane of cane & powerful sugar mills By Suman LayakSHEL PIMPALGAON (PUNE): Cotton farmer Kalu Rathore from Jalgaon district has travelled 300 km south to a hamlet near Pune with his son Gopal, two bullocks, and a cart to find work as labourers on sugarcane farms. Last year, he made little money out of cotton grown on his three acres in his village Chalisgaon. He sold at Rs 4,500 per quintal, while he was hoping for a price of Rs 7,000-8,000. 67812083 Nibbling some breakfast at a cane field in Shel Pimpalgaon, 30 km north of Pune, Rathore told ET Magazine that the money here isn’t great either. The father and son team make Rs 1,000 for cutting and transporting two tonnes of cane per day. But cane farmers of Shel Pimpalgaon are in no position to be better paymasters either. Payment from sugar mills that buy their sugarcane has been slow, and the winter onion crop too is selling at 15% less than cost price. In his forties, Vastajbhau Dondkar of Shel Pimpalgaon grows both cane and onions and says he gets little guidance from the government on which crops to cultivate in a particular year, to avoid a glut and price crash. He was left unimpressed by the budget dole announced on Friday. When contacted, he said: “A bag of fertiliser costs Rs 1,500, so a dole of Rs 2,000, three times a year, is no help. We don’t need doles. We’re selling our crops at less than cost price. That is our biggest problem. What I need is remunerative price for my produce.” 67812098 Maharashtra farmers are also battling a crisis on other fronts. Much of the state is reeling under drought (151 talukas out of 358). Along with cash crops such as sugarcane, cotton and onion, even dairy farming has turned unremunerative — with cattle owners forced to sell milk at Rs 18-19/litre, 33% below the cost. Last week, there were multiple protests in front of the sugar commissioner’s office in Pune, a regulator for the sugarcane sector in the state. The cane harvesting season starts in December and continues till March. Farmers turn in their crop at one of the state’s 191 sugar mills and are paid at a government determined Fair and Remunerative Price (FRP). The FRP provides security to sugarcane cultivation. However, this year there is already a backlog FRP payments in excess of Rs 5,000 crore. The mills have stated their inability to pay up FRP of Rs 2,750 per tonne, citing a sugar glut. Raju Shetti, a Lok Sabha MP from Swabhimani Paksha, was at the forefront of the protests last week and has even threatened to go on a hunger strike if payments are not released. “The sugar mills are controlled by major political parties and they hold on to the cash during election years,” Shetti told ET Magazine. He said a similar crisis was diffused in 2013 by a central government grant. “This year, the situation is worse, and it forced me to come to Pune to agitate,” the Kolhapur-based farmer leader said on January 29. This year, the area under sugarcane cultivation went up by 28% and production is estimated at 927.20 lakh tonne, which could mean a total FRP commitment of more than Rs 25,000 crore. 67812102 For now, the BJP-led state government has promised police action against defaulting sugar mills and also promised to seize and auction sugar stocks at mills to pay farmers. Barely 50 metres away from Shetti’s protest, another sit-in demonstration was being held by members of Shetkari Sanghatana, a body Shetti had broken away from. Executive president Kalidas Apet said the agricultural mess is a “problem of plenty”. “We don’t want subsidies or support price. The government should remove export curbs and other restrictions imposed by the Essential Commodities Act. Indian farmers are capable of finding buyers across the world and make money,” he said. The All India Kisan Sabha, affiliated to the CPI-M, is also getting into the act. Last year, it organised a 180-km march by more than 10,000 farmers from Nashik to Mumbai. It is planning another gathering of 25,000 on the farm crisis this month.Karnataka: Migrating Better Than FarmingBy: Indulekha AravindThe shrunken bolls of white cotton on the rows of straggly plants in Baithunta Doddanagappa’s farm seem to have given up, just like its owner and many other farmers in Aruli village in Karnataka’s Raichur district. “If rains are adequate, I usually get eight quintals of cotton from an acre. Last year, I got one,” says the 55-year old farmer, who owns one acre of land and has taken eight on lease. 67814444 Consecutive years of poor crops, rent for the farmland and the burden of Rs 3 lakh his son borrowed from acquaintances caused frequent tiffs between the father and son, with unintended consequence. This, combined with frequent taunts from the lenders over mounting dues, drove the 26-year-old to die by suicide in the same cotton fields last July, he says. “The last four years have been bad, but 2018 has been the worst,” says the distraught father, who has to support his wife, daughter-in-law and two young grandchildren.Usually, Doddanagappa invests around Rs 15,000 to farm one acre of cotton, apart from paying another Rs 10,000 as rent a year for each acre he leases. If rainfall is adequate, he is able to earn a revenue of Rs 40,000-45,000 an acre. But with the drought wreaking havoc, this dwindled to less than Rs 5,000 an acre last year. 67812156 Raichur is among the arid districts in the northern part of the state, also known as Hyderabad Karnataka. The district, which mainly grows cotton, paddy, tur dal and jowar, is drought-prone and last year was no exception. If the kharif season saw a 56% deficit in rainfall in Raichur, it worsened to 64% in the rabi season, says Chethana Patil, joint director at the agriculture department in Raichur. Over two-thirds of the 6.95 lakh hectares of cultivable land in the district are rain-fed.The rest of Karnataka does not fare much better. In December, the state Cabinet declared 89% of the 176 taluks in the state to be drought-hit, following a 49% deficit in the north-east monsoon. In the kharif season alone, drought and a flood in August had caused a loss of Rs 20,000 crore, according to the revenue department.Farmers are now waiting for the Rs 45,000 crore farm loan waiver announced by Chief Minister HD Kumaraswamy to take effect. "I have filled the form and submitted my documents to the bank. But my loan has not yet been waived," says Babu Gowda, who has taken a bank loan of Rs 1.5 lakh to grow cotton and paddy. The delay has been attributed to the extensive verification process the government has undertaken to identify genuine beneficiaries.But a farm loan waiver alone will not pull farmers here out of the debt cycle. For one, debt to private lenders is often two or three times what is owed to banks. Also, government waivers often go to landowners, leaving tenant farmers out in the cold. Faced with shrinking incomes and loans to repay, farmers are forced to migrate to cities to work as labourers. This is already underway in Raichur's villages, with people heading to Bengaluru and Guntur in search of work. That's possibly why the several farmers interviewed for this report unanimously wanted the Union government to set a fair, guaranteed price for their crops, instead of waiving loans. In the absence of that, the budget proposal to pay Rs 6,000 a year to each farmer owning less than 2 hectares appears to have gone down well. "It's good for small farmers like me," says Doddanagappa.K Anjaneya, who grows paddy, cotton, tur dal and onions on the three acres he owns and the 20 he has taken on lease, also welcomes Friday's announcement. "It's a good move, especially since it will come year after year," he says, when contacted on the phone after the Budget.The youngsters in Anjaneya's village, Bullapur, had spent Rs 1,000 to return from cities and cast their vote for Prime Minister Narendra Modi in 2014. And in 2019? "I think we should give Modi another five years," adds Anjaneya.Uttar Pradesh: Gored by cattle menaceBy: Prerna Katiyar Any discussion about farming in Bundelkhand invariably starts and ends with cattle. “Wheat, gram, mustard, pea, linseed — they spare nothing,” says 42-year-old Chhote Lal, a farmer from Buddia Bamauri village in Mauranipur tehsil, some 70 km from Jhansi. 67812240 Cattle have become calamitous for farmers in Bundelkhand, a region where drought has been a constant woe. Farmers in the region have been practising anna pratha — letting cattle loose from summer to the next sowing season. But now, as more farmers start abandoning unproductive bovines, the animals enter farms and destroy standing crops.Naturally, the number of stray and abandoned cattle is increasing by the day, giving farmers sleepless nights. “I have been here for three days trying to sell my groundnut produce,” says Lakshmi Prasad, 48, of Khadarka village who had travelled 30 km to Mauriyaarpur mandi to sell his produce. He is worried about his standing crop back home. “I have requested my neighbour to keep a watch over my mustard farm. Should a farmer do farming or guarding?” asks an exasperated Prasad. “My neighbour Shailendra Kumar lost almost three-fourths of his pea crop to stray cattle about two months ago.”Farmers in at least five village ET Magazine spoke to say they have lost 25-35% crops every year to stray cattle. Apart from that, the farmers are also haunted by drought, delayed or inadequate monsoon and unseasonal rain and hailstorm. 67812256 Sita Ram Yadav of Nagrai Bhata village, 65 km from Jhansi, says there are at least 300 such cattle in his village alone. The Budget proposal was made without an understanding of the area, he says. Villagers in Bundelkhand typically grow one crop a year, unlike the more fertile west or central UP which can see up to three crop cycles in a year. "The uniform formula of Rs 6,000 for farmers owning up to two hectares clearly overlooks the basic difference between farmers of Bundelkhand with those of west or east UP. We have big landholding but low produce due to low and semi-fertile land and poor irrigation. Restricting income support to those with up to two hectares leaves almost half of us out. Do not give us more water or MSP or loan waiver. Just save whatever we grow from these stray cows so that we have enough for our family," says 49-year-old Yadav.Shiv Narayan Singh Parihar, Bharatiya Kisan Union Bundelkhand president, says the budget is an eyewash. "Rs 6,000 per year for a farmer family of five translates into Rs 3.3 per day per person. This is not even enough for a cup of chai for charcha." Farming woes are forcing many farmers to relocate to cities to work as labourers. Roughly half of the 40 lakh farmers in the region have migrated since last year, according to Bundelkhand Jal Manch, a nongovernment organisation.Punjab: Call for a wider price support schemeBy Ishani DuttaguptaMUHAWA (Amristar): A sense of relief is palpable despite a flowing white beard covering most of Subba Singh’s face. The farmer, who owns 3 acres in Mudhal village, about 20 km from Amritsar, had last week completed the paperwork to claim the waiver on a Rs 33,000 loan, under a scheme announced by Punjab Chief Minister Amarinder Singh in 2017. But the 58-year-old — who grows vegetables, wheat and paddy — knows this is only a temporary reprieve. 67814521 Farmers will continue to experience distress, Singh says, unless there is a complete overhaul of the minimum support mechanism to make returns from farming in sync with the rising input costs. More items such as vegetables and dairy products should also be covered by this scheme, he says. “I grow peas and have to spend over Rs 10 as input costs per kilo. But because of lack of access to markets, I have to sell at Rs 5. Likewise, milk, which was sold at Rs 40 a kg, now fetches only Rs 22. Feed for livestock alone costs Rs 32 a kg,” says Singh, who supports his family of seven, including three children.Both small and big farmers in the village are worried that the prices of products are falling and the input costs are rising. “It is worse for larger farmers as we have no access to loan waivers,” says Lakhvinder Singh, who cultivates vegetables on 8 acres in Mudhal. Marketing the products is tough as traders call the shots. Everyone agrees the solution to the pervading sense of farm distress lies in a long-term financial package, including a restructuring of the minimum support price system as recommended by the Swaminathan commission report. 67812294 Transporting the vegetables to markets in Pakistan is more viable than reaching Delhi or Ahmedabad, say these farmers. “We would have benefitted greatly if Modiji’s government had eased cross-border trade with Pakistan. We hear that vegetables supplies in Lahore, a city just 50 km from here, are currently very low and people are paying exorbitant prices for them,” says Lakhvinder Singh.Farmers of Muhawa, which has a population of 6,000, have been complaining that some border gates are shut for the larger part of the week, and this restricts access to their own farms. "When the nearest gates are shut, we have to often walk extra 10 km or so to cross another gate and reach our farms. This is a daily affair sometimes," says Sahab Singh, whose family owns 30 acres. All farming activities are shut down and curfew is imposed for weeks during border tensions. 67812320 Like in the rest of the state, young men from many villages are also giving up farming and seeking opportunities abroad. Manjit Singh from Mudhal says one of his sons is a taxi driver in France and the other is a farm labourer in New Zealand."We had to sell our ancestral land to pay the Rs 50 lakh needed for them to go abroad." Manjit Singh has 10 acres to farm now but doesn't want to disclose how many acres he sold.The budget proposal of giving Rs 6,000 as annual income support for farming families has not enthused the farmers. Sahab Singh, whose family owns 30 acres, says: "I suffered a loss of Rs 5 lakh due to demonetisation. This Rs 6,000 is a joke. If they want to compensate me, they should at least give me a few lakh rupees." Madhya Pradesh: Season of loan waiversBy Rakesh DixitBHOPAL: It's a lean day at Karond mandi on the outskirts of Bhopal and farmers appear to be more concerned about filling out forms for loan waiver than bring their produce for sale at the market. Barring sugarcane crop from the Mahakoshal region, transportation of other crops is slack. 67814504 “Farmers want to get declared officially free from debt that the government has promised,” says Lal Singh, a farmer in his mid-forties. Owner of 17-acre land, the farmer from Narkheda village in Raisen district says he filled the form for waiver of his Rs 1.5 lakh debt to a cooperative bank last month itself.He has now come to Bhopal mandi to sell urad and soyabean crops. Although the mandi was not crowded, a small group of farmers gathered around Lal Singh as he spoke to this writer. They all agreed that loan waiver is indeed what is uppermost on their minds for now.Rajesh Choksey, a farmer from Deewanganj, however, is unhappy with the scheme. “It’ll dissuade honest farmers like me from repaying instalments in the belief that loan will be waived again and again.”When told about the Centre’s move to give farmer families Rs 6,000 per year, he was unimpressed. “Poor farmers need more relief to avoid being trapped in a debt circle. This is not enough.” 67812361 Lal Singh, on the other hand, expressed happiness over the Centre’s bonanza to farmers. After three difficult years, there is already a season of hope in the Madhya Pradesh farming sector, given farmers account for 70% of the state's over eight crore population. Crops are reasonably good this year and prices are, by and large, stable. Payment to farmers is made half in cash, half digitally, say mandi officials.For now, activity at the sprawling Karond mandi is sparse. It is an off season not only here but across all 225 such centres in Madhya Pradesh. Crop arrival for sale is less than one-fifth of the peak season. "In this mandi, one of the biggest in the state, average crop procurement is between 2,000 and 2,200 quintal per day. In peak season, between April and June, it shoots up to 15,000 quintal a day," says Mandi inspector BL Tyagi. 67812372 Agrarian crisis, which was a major cause behind the BJP's defeat in the assembly election, is showing signs of improvement. There was anguish among farmers over shortage of fertilisers in primary cooperative societies due to delay in release of urea stock for Madhya Pradesh from the Centre in December.But the problem was solved before it could snowball into a crisis like in the past when short supply of fertilisers and seeds would spawn riot-like scenes at various towns. Since the violent farmer stir in June 2017 in which five farmers were killed in police firing in Mandsaur, rural distress in Madhya Pradesh came into national limelight. The Congress cashed in on the farmers plight by offering loan waiver. Chief Minister Kamal Nath signed the file on loan waiver within an hour of taking the oath on December 17.Since then, the cooperative and agriculture departments have been working together at breakneck speed to implement the first decision of the new government since by model code of conduct for the Lok Sabha elections is likely to kick in by March.But that is easier said than done. The government has to mobilise Rs 55,000 crore to unshackle 25 lakh farmers from debt. Since the previous BJP government had left the coffers empty, Nath has curtailed planned expenditures in all departments to pool-in money for farmers. Austerity measures have also been taken.Congress' prospects in the Lok Sabha election will depend on how effectively the state government manages to fulfill its loan waiver promise.West Bengal: Tuber shock By Sutanuka GhosalBURDWAN & HOOGHLY: The Mallick family, which cultivates potatoes at Jamalpur village in West Bengal’s Burdwan district, is staring at a bleak 2019. The year began with a tragedy: their 42-year-old son, Ghulam Ambia, killed himself, unable to repay a debt of Rs 4 lakh. He was cultivating the tuber over 17 bighas of land (2.72 acres), but he dreaded that wouldn’t be enough to pay the debtor as potato prices started crashing. In December 2018, farmers were throwing away the tuber for almost nothing. West Bengal, which is the second largest potato producer in India after UP, has been facing a glut in production for the last three years. 67812391 “This year will be no different,” warns Patit Paban De, an adviser to the West Bengal Cold Storage Association. “Reports from different parts of the state indicate that production could be as high as 120 lakh tonnes due to favourable weather conditions. Our yearly domestic consumption is 60-65 lakh tonnes of potato. So, this year, we will be left with an extra stock of nearly 60 lakh tonnes of potatoes. We also have a carryover stock of 1.12 lakh tonnes from last year.” In 2017, farmers had to throw away potatoes as there were no buyers. “If the cost of production was Rs 4 per kg, we had to sell it for Rs 3-3.50 per kg in March last year, the beginning of the season,” says Suman Kumar Dhank, a farmer from Singur in Hooghly. “As the days passed, the prices dropped to Rs 1.40 per kg. By December 2018, we were getting no price for our produce.” While high production has brought Bengal’s potato farmers to their knees, they say demonetisation also dealt a blow from which they still haven’t recovered. Demonetisation was announced in November 2016 when paddy was being harvested and potato sowing was about to begin. As cash dried up, farmers had to borrow money from moneylenders at an exorbitant rate of interest. They are still bearing the burden of that debt. The fall in tuber prices further added to the woes. In 2014 and 2015, annual tuber production in the state was around 95 lakh tonnes, almost similar to the preceding two years . Prices of potatoes at the farm gate went up and farmers got good money. Meanwhile retail prices went up to Rs 24 per kg, almost Rs 10 more than the normal rate. Seeing the retail prices zooming, Chief Minister Mamata Banerjee put a blanket ban on export of potatoes to other states in 2014. Although she subsequently lifted the ban after prices cooled off, this resulted in two things: farmers thought that if they produced more, they would earn more; and secondly, the neigbouring states started potato cultivation on their own. In the subsequent three years, the Bengal farmers produced more potatoes — 100 lakh tonnes in 2016, 110 lakh tonnes in 2017 and 115 lakh tonnes in 2018 — even as the demand in the neighbouring states dwindled. Year 2018 has been exceptionally bad. The industry in the state, including growers, traders and store owners, are staring at a loss of Rs 2,000 crore. Farmers and traders typically store a certain quantity of potatoes in cold storages, and release it in the market when there is demand. They receive advance money as loans from storage owners against the potatoes loaded. They repay the loan when they offload the stock to be sold. “A large number of farmers and traders loaded a huge quantity of the tuber in cold storages this year in anticipation of prices firming up on the back of lower production. But production was down by just 5-10% and the carryover stock from last year dampened prices, which remained muted throughout 2018,” De said.

from Economic Times http://bit.ly/2DPMZEj