While over 35,000 farmers have gathered in Mumbai to demand an unconditional loan waiver after crop loss due to unseasonal rains among other issues, noted agriculture economist Ashok Gulati has explained why neither loan waiver, nor government’s plan of raising MSP will work at the time of agricultural emergency.
In an interview with CNBC-TV18, Ashok Gulati of ICRIER said that of the four years under the Devendra Fadnavis government, three years have shown “negative growth” in agriculture and similarly, of the four years under the Narendra Modi government, two years were bad. “You can imagine the crisis boiling over,” he said.
He further said that the recovery did not happen in the years following the bad year and due to that prices collapsed despite a good production and farmers still lost. “On the farmers’ front, it was an emergency,” Ashok Gulati told the news channel.
He rejected the idea of farm loan waiver and raising MSP. He said that to calculate the entire formula for raising the MSP is “messy” in this crisis situation and that farm loan waiver is not meant for everyone. He instead suggested the government to provide direct income support for a year or two. “It is an easier and transparent thing to do without disrupting the market,” he said.
He acknowledged a few steps taken by the government but also said that their implementation is still weak. On government’s ambitious plan of doubling farmers’ income by 2022, he said that it was a pipe dream. “Of the 7 years, 2 years have already passed. And you need 13% growth per annum in 5 years to achieve that target. It’s a pipe dream. 2030 is still sustainable, through productive routes,” he added.
Ashok Gulati opined that the government can dole for a year, but cannot do it every year and sustainable measures are required. “Today you can dole, can you do it every year? Raising aspirations and expectation will be around their neck. The reality is that the growth rate (agriculture) is only 2%,” he said.
He explained that with international prices coming down, India’s exports were hit. “There was tremendous pressure. The government can give some sort of subsidy or backend support to support exports,” he said. He said that the government needs to steps that do not strangulate the markets. He also said that in the food processing sector, the investment was peanuts and it was needed to go up by five times.
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