It's grain gain for govt, not farmers

With wheat procurement for the central pool touching a record 123 lakh tonnes, the Punjab government is laughing all the way to the bank. Farmers, however, are not feeling so good.

The Punjab government, which levies 12% taxes on the Centre for procuring wheat, has earned Rs 2,000 crore so far, Rs 700 crore more than in the previous season.

Farmers' earnings from the sale of wheat have reached a record Rs 16,000 crore, Rs 4,000 crore more than last year's income. As there are 12.5 lakh farming families in the state, as per official records, the income of each has increased by just Rs 32,000 per annum. However, the ever-rising input costs have dampened their spirits.

"There is no reason for farmers to rejoice," said Satnam Singh Behru, president of the consortium of Indian Farmers Associations. Behru, who took over from MS Swaminathan, demanded that the latter's recommendations about linking the minimum support price (MSP) to the price rise index and input costs be implemented to make farming a profitable venture.

"One season of good produce and rise in income would not solve farmers' woes. There has to be a long-term plan," he added.

The wheat MSP in the current rabi season is Rs 1,285 per quintal. In the previous rabi season, the MSP was Rs 1,100 per quintal and a total of 109 lakh tonnes was procured for the central pool.
Punjab charges 5% value-added tax (VAT), 2% rural infrastructure development fund, 2% market fee and 3% infrastructure development (ID) cess. However, the Centre has allowed only 2% ID cess so far.

"We are pursuing the matter with the central government. Hopefully, we would get 3% cess," said DS Grewal, secretary, food and civil supplies, Punjab.

Commission agents (arhtiyas) get a cut of 2.5% on the procurement. They have earned Rs 400 crore so far in the current season.

Punjab's director, agriculture, Dr Mangal Singh said the state had made a clear-cut profit, but the higher input costs had minimised farmers' gains.

"The government has worked hard to help farmers get a better produce, but the MSP should be in proportion to the input costs," he added, demanding that the central government's Rashtriya Krishi Vikas Yojana (RKVY) be taken to all districts in the state.

Noted economist Dr Sucha Singh Gill, director general of the Chandigarh-based Centre for Research in Rural and Industrial Development (CRRID), said connecting the MSP to the price rise index was wishful thinking. "The key issue is to grow high-value crops and deviate from the wheat-paddy cycle. Farmers can really earn only by changing the cropping pattern," he said.