Sunday, April 15, 2012

What alternatives are left for a rice farmer?



The Miller’s tale in my previous blog entry illustrated quite clearly, that the Miller cannot be unseated by Government intervention, unless the state wishes to get further into a hole to help the farmer. As it is they are in the Rs50B fertilizer subsidy hole not to help the farmer as I have amply illustrated, but to get the farmer vote. I have also said that even if 20% of one’s income (not even profit) is from farming the person claims they are farmers and in the Census they will be counted as such even though he runs a small kade, where most of his income comes from.

The person or his wife does not want to mention the kade, to the census enumerator because they fear that samurdhi(welfare) benefit will be cut. So the census records a huge error in the number of farmers. The subsidy therefore is the sacred cow, dragging development of the country and of the farmer as well, as he is making incorrect agricultural decisions based on this false price he pays for this input.

In that context when farmers have no control over the price they receive and if market forces offer a price far lower than the cost of production, the state with the limited resources at their disposal cannot further subsidize them by either purchasing their produce or by increasing the unit price offered to them, without affecting other resources they are committed to.

Farmers at the margin will just have to change the crop, leave their land fallow, or rent it to another which may be the most practical, as at least there will be some net income and not an outlay. He will have to sell his services, for wages and the daily wage on labor is now nearly Rs1000 far more than these marginal farmers can expect to earn as their own boss in planting a few acres of paddy.

It is important that this reality is explained and all alternatives they could adopt are also explained. The fact that many farmers have for say 30 years grown the same crop in the same way, expecting the state to bail them out if something goes wrong is not a reason to continue in the same age old tradition. Times have changed, we now have a visible surplus of paddy over our consumption patterns and we must tackle this problem head on making hard choices, rather than delay them by way of subsidy or state purchase.

It is time we drastically improve productivity, by using the large earthmovers to change the fields to those that large 4 wheel tractors can be used and realize the days of the two wheel tractor is over. We do not have labor to operate them let alone change the wheels each morning before putting the machine into the fields.

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