Millennium Post

Farm concerns

Just a day after Madhya Pradesh Chief Minister Shivraj Singh Chouhan announced his indefinite fast in a bid to restore peace in the state following weeks of intense farmer protests, he called it off. As farmers in Madhya Pradesh continue to stage loud protests for loan waivers and fair prices, Chouhan assured them that his government would ensure profitable prices for their produce. The Chief Minister had also promised a loan settlement scheme for defaulters and announced the formation of a new commission that would look into ensuring fair prices for their produce. From Maharashtra to Madhya Pradesh, there are definite similarities to the farmer agitations in their respective states. These agitations are mostly happening in the more prosperous agricultural belts in Western Maharashtra and the Malwa region of Madhya Pradesh. Unlike drought-prone areas of this country, farmers from Malwa, for example, have often seen good times, particularly from 2010 to about 2013, during a global boom in agricultural commodities and increasing domestic demand. Since mid-2014, and especially from November, however, farmers have experienced a severe dip in prices across a whole host of crops (soybean, green gram, potatoes, tomatoes, and onions, among others) owing to both supply and demand side reasons. The government claims that there has been excess production--a supply side concern. However, some experts contend that there is a demand-side issue, too, at the back of the Centre's demonetisation initiative late last year. Most trade in agricultural produce is conducted through cash.

The inability of formal systems of finance to fill the liquidity vacuum left behind by demonetisation has reportedly hit farmers hard. "With nobody to buy and stock up, the speculative capital that used to buoy commodity prices has practically ceased to exist. And it's farmers who have taken the ultimate hit," says a recent editorial in The Indian Express. In Madhya Pradesh, a state which has seen record production of various crops in the past few years, farmers have felt this pinch acutely. They aren't exceptionally keen on a loan waiver, as much as price stabilisation. With dwindling prices, they are unable to make enough money even to service the cost of growing a particular crop. This is a problem that both the Centre and State government must address at the earliest.

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