Indian sugar mills association

Wheat, paddy `unrewarding` for

Date:	28 Oct 2011

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News ID:	620

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Chandigarh, October 27: The fixing of minimum support price (MSP) of wheat at Rs 1,285 per quintal has caused considerable resentment among farmers. Even Chief Minister Parkash Singh Badal has strongly disapproved the wheat MSP, terming it as a `shocker` for farmers.

Earlier, the farmers had protested when the Centre announced Rs 1,110 per quintal as the MSP of paddy (grade A) in June this year.

The state government had urged the Centre to fix the wheat MSP at Rs 1,800 per quintal. Is the growing of paddy and wheat remunerative for farmers taking into account the existing MSP of both crops? The straight answer is: It is not remunerative to grow paddy and wheat, especially for small and marginal farmers, if one is to include family labour and the rental value (per annum) of the land in the overall production cost of both the crops.

`However, if the family labour and rental value is excluded, then it is remunerative to the extent that a small farmer family can merely survive on it, but still cannot think of a decent living,` said Balwinder Singh Sidhu, Director, Agriculture, adding that the family could not meet its social needs such as spending on children`s education, marriages and other social obligations. `That is why almost all small and marginal farmers are under debt in the state`.

Earlier, in consultation with the Punjab Agricultural University (PAU), the Agriculture Department had pegged the cost of production of paddy for the current fiscal year at Rs 1,500 per quintal. It included the rental value of land and family labour, besides a margin of 20 per cent. However, the MSP announced was Rs 1,110 per quintal.

Both PAU and the department officials worked out the cost of production by using a scientific method to obviously avoid facing any embarrassment while presenting the document to the Commission for Agriculture Costs and Prices, an organisation given the task to recommend the MSP of various crops to the Central Government before it is approved by the Union Cabinet.

The cost of production of wheat was worked out at Rs 1,700 per quintal for the current fiscal year. However, the MSP has been pegged at Rs 1,285 per quintal. Moreover, the Bharti Kisan Union (Rajewal) had calculated the production cost of wheat at Rs 2,909 per quintal (including 15 per cent profit for farmers) and of paddy at Rs 2,295 per quintal. Balbir Singh Rajewal, BKU president, had also submitted a memorandum to Union Agriculture Minister Sharad Pawar and the CACP in this regard.

However, in case, the rental value and family labour is excluded from the cost of production, there can be a net return in the range of Rs 20,000 per acre for growing paddy and about Rs 17,500 per acre for wheat at the existing MSP. This figure has also been worked out by a state government organisation. That means, a farmer owning 5 acres can earn about Rs 1,87,500 from paddy and wheat crop cycle in a year.

Again, the sum is hardly sufficient for a farmer family of five members to have a decent living. If one divides Rs 1,87,500 by 365, the daily income of the family comes to a little more than Rs 100 per head per day, less than the daily wage of a casual labourer. For farmers owning land above 10 acres, farming is viable to some extent and for big farmers owning land in the range of 50 acres or above, it is a remunerative profession.

Dr MS Sidhu and Dr Sukhpal Singh, both senior economists of the PAU, said without financial support from other sources, life for small and marginal farmers would continue to be stressful. Dr Sukhpal Singh said during the past some years, about two lakh small and marginal farmers had moved out of the farming sector.

MEAGRE MSP

It is not remunerative to grow paddy and wheat, especially for small and marginal farmers, if one is to include family labour and land`s rental value in the overall production cost of crops

For farmers owning land above 10 acres, farming is viable to some extent and for big farmers having 50 acres or above, it is still a remunerative profession

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