It all started with 500 farmers in Achanta, a village in Andhra Pradesh’s West Godavari district, covering around 4,500 acres of land. The farmers decided to declare a ‘crop holiday’, which means "the fight with inflation will start all over again".
the agricultural equivalent of a manufacturing shutdown.What started as a small movement of non-cooperation is picking up steam in Andhra Pradesh and neighbouring southern states. It could threaten to engulf some northern states, too. If the movement spreads, the UPA’s Food Security Bill and anti-inflation strategy will be in tatters.
The crop holiday has now spread to 300,000 acres in Andhra Pradesh alone, which would result in a loss of 1.5 million tonnes of rice for the year. This quantity is 5 lakh tonnes more than the government’s export quota for the year.
If the movement catches on in other states, Achanta could set off a new power struggle to change the terms of trade between industry and agriculture, urban and rural areas. This small village was a testing ground for the green revolution in the mid-1960s.
There are two main reasons for the farmers to ‘revolt’ in such a manner.
1) The first is that the cost of production, after NREGA (National Rural Employment Guarantee Act) pushed up costs all-around. Even if the crop is sold at the minimum support price (MSP), farmers say they are making losses. This is because the data used to calculate the MSP of rice is based on 2007-08 numbers.
Labour costs have shot up over four-fold with the implementation of NREGA. During the peak agricultural season their cost is around Rs 350-400 per day. While there is no need to deny higher wages for the lowest sections of society, a similar increase in MSP was needed to offset this cost, as was recommended by the National Commission for Farmers, headed by Prof MS Swaminathan, aimed at redressing the distressing conditions of 600 million farmers. The commission had suggested increasing the MSP by 50 percent across the board.
To ensure that NREGA does not make agriculture viable, the Centre has asked states to avoid making NREGA active during the peak agricultural season, says
The difference between the wages of agriculture and non-agriculture workers has increased from 1:1.8 in 1950s to 1:5.2 in 2010; in other words, a person deciding to stay back in his village and work will be paid one-fifth of what he will get if he decides to work in a manufacturing sector. The 11th Plan highlights the tale of an agriculture worker when it says “GDP per agricultural worker is currently around Rs 2,000 per month, which is only about 75% higher in real terms than in 1950 compared to a four-fold increase in overall real per capita GDP”.
2)The second reason is the huge pile of foodgrain stocks. Farmers in Andhra Pradesh still have over 30 percent of their stock from the previous season. Taking advantage of the stock pile, millers in the area are procuring the produce at a huge discount to the MSP (Rs 6.5-7 per kg as compared to Rs 10.80 per kg of MSP).
The government’s decision to allow exports of rice came five months after it knew that the country would have a bumper crop. The only people who will benefit from this export quota are traders and millers who have the financial muscle to hold the inventory and take advantage of higher prices and such sudden quota releases.
According to a Nabard report, small and marginal farmers who account for 80 percent of total land holdings and 36 percent of area have no access to bank credit. Thus releasing an export quota, when the domestic farmer is bleeding is playing right in the hands of the traders (read hoarders).
The bigger problem is, such attitude of the government at a time when it is contemplating to introduce and implement the Food Security Bill, will be very dangerous for the agriculture sector. If the bill is enacted, grain procurement would increase to 60 million tonnes as compared to around 40 million tonnes currently. The MSP has to be properly calculated and implemented if the government is expecting success for the bill.
Issues related to farmers do not generally get the same kind of attention as news related to food inflation. Take for example, the ‘crop holiday’ announced by farmers in Andhra Pradesh for this kharif season. Don’t think that this phenomenon will be confined to Andhra Pradesh. Those leading the ‘crop holiday’ campaign have begun to talk to their peers in Punjab, Tamil Nadu and Karnataka, asking them to go on a partial crop holiday as a mark of protest against net negative incomes.
These farmers belong neither to the rain-fed areas nor the drought-prone regions. They belong to the water-rich districts of East and West Godavari, Krishna and Nellore.
The reason for not growing kharif crops is:
1) it has become unviable.
2) The cost of production is far higher than the returns they get.
The extent of area under crop holiday is not insignificant. Farmers’ organisations have put it at three lakh acres! One may dismiss this, saying that it is just a fraction of the total arable land in the country. But when you convert acres into yields, it will certainly send a chill down your spine. At five tonnes an acre (two in kharif and three in rabi), the country is all set to lose 15 lakh tonnes this year!
If more farmers in Andhra Pradesh and other States join this new kind of protest, the extent of loss would be much higher and pose a serious threat to country’s food security. More than the loss itself, the desperation in the farming community poses a long-term challenge.
IMMEDIATE EFFECTS
The problem deserves immediate attention, because it is not a problem that can wait. After suffering for several seasons, it occurred to the farmers that it makes sense (by not making losses) for them to skip a season. This mirrors a serious crisis in Indian agriculture. If the thinking in the water-rich areas is such, one can only imagine the plight of those farmers in rain-fed areas.
One can argue that this is just a protest and that farmers cannot afford to do this forever. Agreed. But this is a strong political statement by farmers, with serious implications for food security and employment in rural areas. This crisis is driving the youth away from agriculture and allied activity. You find almost no young people to carry out farming chores or to work in the fields. And this is certainly not going help the country as it braces to feed 140 crore people in 2026.