Apr 20, 2015

How long will we continue to have a primitive form of crop insurance?

My daughter, studying in the US, recently shifted to a new flat in the suburbs of Los Angeles.  I went to Google maps on the internet, and after a few minutes of tracking, was able to locate her house on the map. The picture of the building where the flat was located was in front of me. Looking at the locality, the surroundings and the landscape around, I became confident that she’s living in a decent and safe locality.

Why I am narrating this is to explain how technology has made it possible for us to even spot a house thousands of miles away and also counts the number of trees. Forest cover is being determined by satellite images. Crop estimates are being prepared using remote sensing data. But when it comes to assessing crop losses that farmers suffer from weather anomalies, the insurance companies backtrack. If a farmer’s crop is completely destroyed, the crop damage that the insurance companies offer to compensate him is the average loss in 70 per cent of the block.

This primitive insurance system prevails at a time when unseasonal rains, hailstorm and strong winds have caused extensive damage to the standing crops. With crop damage extending to over 11 million hectares in 14 States, crop losses have already dealt a severe blow to farmers. With rains continuing to dampen farmer hopes, and with nearly 200 farmers committing suicide, many of them dying from shock, an effective crop insurance scheme could have minimized the blow.
If your car gets a hit, you can claim the damage. If your house is burnt down the insurance company will pay compensation irrespective of whether other houses in the colonies suffered or not. Why then an average in a block is taken as a measure for crop losses suffered by a farmer in a village is something I have never been able to understand. It is simply the failure of the government to make it obligatory for the insurance companies to provide per unit coverage to farmers that has left the farming community hapless. Insurance companies will obviously resist, but the government must ensure that they are made to deliver. Crop loss assessment must shift per unit basis, insuring each and every farmer.

But for nearly three decades, I have watched with dismay the reluctance on the part of successive governments to provide for any meaningful crop insurance plan for farmers. The comprehensive crop insurance scheme that the Ministry of Agriculture has now prepared – called, the National Crop Income Insurance Scheme (NCIIS) – and expected to be soon piloted in 50 districts across the country, is unlikely to provide any succor to the beleaguered farming community facing crop losses. What shocks me is that even after three decades, all that the government has managed to come up with is a shoddy proposal, a rehash of an earlier failed Farm Income Insurance Scheme introduced in 2003, and withdrawn in 2004.

As the name suggests, the scheme is designed to provide insurance against fall in prices as well as drop in crop yields. In case of yield losses from natural calamities, a disease attack or otherwise, it still follows the primitive methodology of basing the compensation on 70 per cent of the average loss in a district. This only shows that the planners haven’t learnt anything from the technological improvements.  The NCIIS draft does illustrate 4 probable scenarios and the compensation that a farmer will get in each of these. For instance, if a farmer’s yield is 4 tonnes/hect and indemnity being 70 per cent, the compensation would be worked out based on 2.8 tonnes only.

The guaranteed income that the farmers will get under the new insurance scheme would be to a maximum of 20 per cent of the price fall (against the Minimum Support Price) that a farmer suffers. It is based on a threshold yield, the average yield for past 7 years in a district. In other words, if the wheat MSP is Rs 1450 per quintal, and the farmer gets only Rs 900 by selling it openly in the market, the assured price that the farmer will get is Rs 900 plus 20 per cent of the gap between market price and MSP. Against Rs 1450, a farmer under the new insurance scheme can expect a maximum of Rs 1110 per quintal. This is distress price. If a distress price is all that the government assures it will provide to farmers, I think the message is clearly on the wall. Farmers must quit agriculture. 

The only good news on this front that I can share is Madhya Pradesh chief minister’s promise of setting up a State Crop Insurance scheme wherein farmers will be insured on per unit basis, and not on block averages. I hope more and more chief ministers understand the need for a crop insurance that is effective and meaningful. 

Govt lets down farmers yet again. Hindustan Times, Chandigarh.
April 20, 2015. 

Apr 16, 2015

All pesticides listed by WHO as 'cancer causing' are used widely in India


Five popular chemical pesticides – Glyphosate, Parathion, Malathion, Diazinon and Tetrachlorvinphos – that the research arm of the World Health Organisation (WHO) categorized as ‘probable or possible carcinogenic’ are widely used in India.

While the report has triggered a massive debate in Europe and America on the need to regulate or ban these pesticides, it has been simply glossed over by policy makers, scientists and environmentalists in India. For a country which spends more time discussing pedestrian issues, health and environment are far away from national concerns.

The International Agency for Research on Cancer (IARC) at Lyon, in France, has categorized the most popularly used herbicide Glyphosate, which comes branded as Roundup, as ‘probably carcinogenic to humans’.  Two of the pesticides – Tetrachlorvinphos and Parathion – have been classified in the 2B category and rates as ‘possibly carcinogenic to humans’ while three other chemicals – Malathion, Diazinon and Glyphosate – as ‘probably carcinogenic’ and put in the category 2A. These are all organophosphates. 

In India, while Roundup is the most popular used herbicide, Methyl Parathion, Malathion and Diazinon too are widely used in agriculture. Tetrachlorvinphos is approved for flies and ticks. Interestingly, many of the chemicals are approved for restricted use, knowing very well there is no way to check its actual application. Take for instance Methyl Parathion. Its use is banned for fruits and vegetables, and also for crops where honeybees are acting as pollinators. How can the Central Insecticides Board expect farmers to make a distinction between honeybee pollinating crops and other when applying Methyl Parathion?

Similarly, Diazinon is banned for use in agriculture except for household purposes. Is there any way to police the farmers after they have purchased the chemical from the market? How will you know, given the educational standard of Indian farmers, whether they read the fine print on the pesticides container and apply accordingly? Take Methyl Parathion use in fruits and vegetables. It is officially banned, but it is widely known that traders dip certain vegetables in Methyl Parathion solution as it provides shine to the veggies.

The pesticides registration process therefore is a sham. Since it escapes public scrutiny, I haven’t seen the working of the Central Insecticides Board ever come under the scanner of the investigating agencies.
Some 860 pesticides are registered for use in India. As many as 67 pesticides banned in other countries, are being used in India.

There is a strong lobby in favour of chemical pesticides, and every time environmentalists question the need for some of these pesticides on health and environment grounds, a court case is often slapped. So much so that film star Aamir Khan too was served legal notices after his show on pesticides in Satyamev Jayate. Nevertheless, I still remember a study published by Dr David Pimental of the Cornell University in the late 1970s wherein he estimated that 99.9 per cent of the pesticides go into the environment and only 0.1 per cent of the pesticides hit the target pests. I had always wondered why this study was never taken seriously by agricultural scientists knowing very well how toxic these chemicals are.

The International Rice Research Institute, in Manila, the Philippines, too showed in early 2000 that pesticides on rice in Asia were ‘a waste of time and effort’. The IRRI study showed how farmers in Central Luzon province of the Philippines, and in Vietnam, Bangladesh and India were producing a bumper rice harvest without using chemical pesticides. Even this report was never taken seriously by the Indian Council of Agricultural Research (ICAR), the umbrella organization for farm research in the country. And when I hear Ajay Vir Jakhar, president of the Bharat Krishak Samaj say that pesticides use in wheat has gone up by 300 per cent, a crop which is generally considered to be hardy not requiring much application of chemical pesticides, it clearly shows how ruthlessly harmful pesticides are being promoted. 

Genetically modified (GM) crops have further pushed the application of chemical herbicides through the spread of herbicide-tolerant crops. It is primarily for this reason that the global market for pesticide is expected to grow from $ 197.9 billion in 2014 to $ 207.9 billion in 2015 and soar to $257.7 billion in 2019 (see the industry report: https://www.reportbuyer.com/product/170499/). The WHO report should therefore be used as a loud warning, and immediate corrective steps are called for. We can ignore the warning at our own peril.

Apr 14, 2015

Killing farming by simply keeping the farm incomes low.

Prime Minister Narendra Modi has announced a higher relief package for farmers. At the same time he has directed banks to restructure agricultural loans and also asked insurance companies to proactively settle the claims. “Helping farmers at this time of distress is the govt’s responsibility,” the prime minister assured the nation, stating that a team of central ministers were sent to the affected areas to assess the crop damage.

This is certainly a welcome step. But once the rains are over, the relief is distributed, and the nation’s attention shifts to how much is the loss in crop production and the resulting impact on food inflation, farmers will once again be forgotten.  This has been the travesty of farming all these years, and it is primarily for the deliberate neglect and apathy that agriculture continues to bleed.  In the past 20 years, close to 3 lakh farmers have committed suicide, 2 farmers every hour, and I am not sure how many more sacrifices are required before the nation sits back and takes notice.

Let’s be clear. The spate of farmer suicides in the wake of continuing spell of unseasonal rains is simply a reflection or a symptom of how fragile the farm economy is. Even a small aberration in weather – unseasonal rains, high winds, dry weather and drought – multiplies the risk factor for the farmers to a level that it becomes unmanageable.  Many farmers, who died in the past one month, died of heart attack, unable to bear the shock of seeing their healthy crop lying flat. Livelihood security therefore for any farming family hangs by a slender thread.

How fragile is the farm economy has been talked about very often, but little understood. It is generally believed that a reasonably good relief package at times of a calamity is enough to bring back the farmers economy. What is not know is that any natural calamities like heavy rains, floods and drought push back the farmer’s subsistence economy at least by three years.

To understand it a little more clearly I looked at the latest kharif and rabi reports of the Commission for Agricultural Costs and Prices (CACP). Since farmers have been demanding a higher minimum support price (MSP) for wheat and paddy, and knowing that the Centre has already conveyed to the Supreme Court its inability to raise farm prices by 50 per cent as ‘it will distort market prices’ a careful perusal of the cost and income estimates by the CACP tells us why farmers are killing themselves. Unless the government makes a determined effort to provide farmers with a guaranteed monthly income package I don’t see any hope of reviving the sinking farm economy.

Let us look at the costs and the return from the cultivation of some of the major crops of the region. The CACP is government’s own organization which works out the MSP for farmers. Its calculations therefore are more accurate than any other study or survey. In its latest reports, CACP has calculated the average cost and returns for the period 2010-11 and 2012-13. Now hold your breath. Accordingly, the net return for wheat on all India basis stands at Rs 14,260 per hectare. For Mustard, the return is Rs 14,960; and for gram Rs 7,479.

Since most suicides happened in Uttar Pradesh, I looked at the cost and price calculations for wheat-rice cropping pattern that most farmers would follow. For wheat, the average net return or income that a farmer gets from one hectare is Rs 10,758. Since wheat is a 6-month crop, the average income a wheat farmer can expect from cultivating one hectare comes to a paltry Rs 1793. With such a low return from wheat cultivation, there would always be a possibility for a UP farmer to take to suicides. Let’s now look at his annual income. If he is cultivating rice, the net returns have been computed at Rs 4311 only. Add the returns for both wheat and paddy it comes to Rs 15,669 or Rs 1306 per month.

Now, you will say that the average in Punjab would be much higher than the national average. The CACP works out the average net return in Punjab for wheat at Rs 18,701 per hectare. For Bihar, where there are no regulated APMC markets, average farmer’s return is Rs 9,986, about half of what Punjab farmers get.

In the case of kharif crops, the CACP estimates are for the period 2009-10 to 2011-12. The net return for paddy for the country has been computed at a low of Rs 4,500 per hectare. For cotton, another major crop, the net returns are to the tune of Rs 15, 689; and for ragi millet it is actually negative. Looking at the State-wise average costs, the net returns for paddy for Punjab is Rs 17, 651. For Haryana, it is Rs 17,960 per hectare, and for Andhra Pradesh Rs 6,483. Paddy farmers in Bihar and Assam get a negative return, which means they cultivate losses. The loss per hectare in Assam is Rs 3361 and in Bihar Rs 266.   

Since the general cropping pattern that Punjab and Haryana farmers follow in a year is also wheat followed by paddy, let us look at the combined returns for cultivating these two crops. Wheat provides the Punjab farmers with an average return of Rs 18,701 per hectare. Add to it the net return from paddy, Rs 17,651, the total a farmer earns from cultivating wheat and paddy in a year comes to Rs 36,352 from a hectare. For a month, the average a farming family in Punjab earns from one hectare is Rs 3,029. Yes, you got it right. It is Rs 3,029 per month.

If this is the average for Punjab, Haryana and Uttar Pradesh, which is considered to be the country’s food bowl, I shudder to think of the plight of farmers elsewhere in the country. This is primarily the reason why farmers are committing suicide, and also why a majority wants to quit agriculture if given a choice. The desperate need therefore is to set up a National Farmers Income Commission with the mandate to work out an assured monthly package for farmers depending on his crop productivity and also the geographical location of the farm. If a chaprasi can get a minimum monthly salary of Rs 15,000: and a safai karamchari in UP is paid Rs 18,500 as basic salary, why should the annadata not be get an assured monthly package. Why should the farmers alone bear the cost of keeping food prices low for the middle class? #

Suicidal apathy. Orissa Post. April 16, 2015

Why relief packages and loan waivers won't enough to stem farm suicides. IndiaTogether. April 13, 2015

जाना पहचाना संकट. Dainik Jagran, April 11, 2015

Apr 9, 2015

Farmers have become a burden on the country. Their plight is deliberate.

There is trouble on the farm front. With untimely rains accompanied by hailstorm and strong winds showing no signs of relenting, further deepening the prevailing agrarian crisis; and with the spate of farmer suicides on the rise, agriculture faces its worst ever crisis. While the rising number of farmer suicides is only a reflection of how fragile the agrarian economy is, the entire focus is on providing adequate relief and compensation to farmers who suffered crop losses.  

In this bargain, the real issues confronting farming are once again being sidelined. Once the rains are over, the relief is distributed, and the nation’s attention shifts to how much is the loss in crop production and the resulting impact on food inflation, farmers will once again be forgotten. This has been the travesty of farming all these years, and it is primarily for the deliberate neglect and apathy that agriculture continues to bleed. 

The intention is very clear. With the Centre conveying to the Supreme Court its inability in providing farmers with 50 per cent profit over the cost of cultivation, farmers are being left in the lurch. They are expected to fend for themselves, and face the vagaries of the markets once the Government begins to withdraw the minimum support price (MSP) for wheat and paddy. Economic Survey 2015 has made this amply clear.   

Farmers have reasons to feel betrayed. After a high-pitch election campaign a year earlier when the BJP’s prime ministerial candidate Narendra Modi time and again promised to enhance the Minimum Support Price (MSP) by 50 per cent if his party comes into power, the government has simply backtracked on its promise. But soon after coming into power, the government raised the MSP for paddy and wheat by a paltry Rs 50 per quintal, which translates into an increase of 3.6 per cent, not enough to offset the additional burden of inflation at that time.

The farmers’ anger is quite justified. Despite being at the bottom of the pyramid, Indian farmers have not failed the nation. While they continue to produce a bumper harvest year after year, they are made to pay the price for keeping food prices low for consumers. A per the latest estimates of the National Sample Survey Organisation (NSSO) a famer family on an average earns only Rs 3,078 from farming operations. According to another survey, nearly 58 per cent of the farmers go to bed hungry. Another survey by Centre for the Study of Developing Societies (CSDS) shows that 62 per cent farmers want to quit agriculture. 

On top of it, basmati rice and cotton witnessed a crash in its prices. While basmati rice production had doubled in Punjab and Haryana, an alarming dip in prices was observed. Disappointed farmers sold basmati at prices ranging between Rs 1600-2400 per quintal, against a price of Rs 3,261 to Rs 6,085 they got last year. In cotton too, prices slumped from an average of Rs 4,400 to Rs 5,200 per quintal last year to around Rs 3,000 this year, prompting the government to direct the Cotton Corporation of India to step in to buy at the procurement price of Rs 3,750 per quintal.

In Maharashtra alone, the downtrend in cotton and soybean prices had resulted in a loss of Rs 12,000-crores for farmers.

In case of sugarcane the situation is no better. In fact, reports of cane farmers committing suicide due to delayed payments have poured in recently from Uttar Pradesh, Maharashtra and Karnataka. Despite the sugar sector decontrol coming into effect, the fact remains that the mills have still to clear cane price arrears of Rs 12,300-crore.

Appearing before a Supreme Court bench of Justices S J Mukhopadhaya and N V Ramana, the additional solicitor general Maninder Singh however said: Prescribing an increase of at least 50 per cent on cost may distort the market. A mechanical linkage between MSP and cost of production may be counter-productive in some cases.” He told the court that the pricing policy seeks to achieve the objective of fair and remunerative prices and is not an income policy. While the Court is still to deliver its verdict, in simple words, the government has expressed its inability to hike the MSP.

At a time when the industry has managed to even wrest out of cost accounting procedures in many important sectors like coal, natural gas and automobile, and therefore can arbitrarily fix any price for their products, I find it amusing to know that providing a higher price to farmers will distort the markets. Considering that only 6 per cent India’s 60-crore farmers get the benefit of MSP, and the remaining 94 per cent is in any case dependent on the vagaries of markets, which shows the markets are only exploiting the farmers. If the markets had provided farmers with an economic price, I am sure 94 per cent of the farming community would have been a happy lot by now.

The question of an ‘income policy’ for farmers therefore assumes importance in the wake of the serial death dance that continues to be enacted on the farms. Over 3 lakh farmers have committed suicide in the past 17 years.  Moreover, with the World Trade Organisation (WTO) breathing down the neck, and demanding freezing of MSP for farmers, it looks difficult whether the government will have the political courage to defy WTO. Given these circumstances, the best option is to start looking for a guaranteed monthly income for farmers, which benefits the entire farming community unlike the pricing policy through a system of providing MSP for wheat and rice farmers.

The real big bang in economic reforms would therefore be when the government constitutes a National Farmers Income Commission that works out a minimum assured monthly income that a farming family must get. Incorporating crop harvest and also basing the calculations on the geographical location of the farm, the Commission should be directed to provide a real time estimate of the farm income for various categories of farmers. If a chaprasi in the government can get a minimum basic salary of Rs 15,000 per month, I see no reason why the farmers should be deprived of his legitimate due. #

Farmers urgently need help. April 9, 2015. DNA Mumbai.

खाली हैं अन्न उपजाने वाले हाथ April 9, 2015, Amar Ujala