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Farmers reeling under free market forces

By W.Chandrakanth

HYDERABAD, JUNE 10. The promise of free power supply to the farm sector by the new Congress Government in Andhra Pradesh has had little impact on the farmers' psyche and their suicides continue at a disturbing regularity.

The new Chief Minister, Y.S. Rajasekhara Reddy, signed the first file assuring free power supply to farmers, minutes after taking oath on May 14. Suicides by farmers a major election issue (the Opposition claimed that over 3,000 farmers had committed suicide in the last four years in the State and, perhaps, a major factor in bringing the Congress back to power.

Alarmed over the continuing suicides — 160 since Dr. Reddy took over — the Government has announced the waiver of Rs.1,200 crores worth power dues and Rs. 410 crores worth free power a year. It has asked the banks to agree to a one-time settlement of dues under which distressed farmers could pay Rs.50,000 for the waiver of credit. He also called a halt to the forcible collections of dues.

The crisis in the farm sector is a complex issue and free power or a few ad hoc measures will not change the scenario much as the farmer is reeling under the impact of free market forces while battling the burden of loans. A combination of factors such as high seed and fertilizer prices, withdrawal of Government interventions, the role of private seed manufacturers and traders and pressure by private moneylenders and financial institutions weigh heavily on the farmers and drive them to desperate measures.

The openings of the market to multinationals and slashed subsidies have crippled the rural economy. The prices of urea, DAP and Murate of Potash have hit the roof, forcing the farmers to invest up to 400 per cent more on cultivation. The price of urea was Rs. 138 a bag of 50 kg in 1992. It is Rs. 251now. The DAP price has gone up from Rs. 234 to Rs. 486 while the MoP price costs Rs. 231 against Rs. 885.

During the period, the seed input has gone up by about 200 per cent — in the case of multinational company seeds, up to 400 per cent. The paddy seed would have cost Rs.170 a bag of 30 kg in 1990 but it is now more than Rs. 360. Likewise, the prices of cotton and chilli seeds have gone up by 400 per cent.

The Agriculture Department is not very active in regulating or monitoring the seed quality. There is no check on unscrupulous marketing strategies of pesticide companies or on the efficacy of the products. For example, monochrotophos is available at Rs.120 against cash payment and Rs. 300 (MRP) on credit. The MRP provision thus helps the trader make a killing. The Government used to supply basic pesticides till four years ago through its agro agency, but the facility was scrapped in favour of private market, eliminating the benefit in both quality and price of the pesticides. Government intervention in spraying pesticides has also dwindled.

The water cess has gone up by 266 per cent in the last 12 years laying an additional burden of Rs.70 crores on the farmers. The neglect of irrigation has led to 20 lakhs acres lying fallow. Irregular power supply has had its adverse impact while the dependence on pump sets has gone up from 12 lakh in 1985 to 22.87 lakhs. The power tariff had gone up from Rs.50 a horsepower to Rs. 625.

There are at least 30 lakh farmers under the `kauldari' system (tenancy) in the State according to an estimate and even the free power facility would not reach them, as the land is not in their names. A profile of the landholdings shows us that the marginal farmers constitute 60 per cent of the total farm population possessing 20 per cent of the land. The small farmers have 22 per cent land and they are about 21 per cent of the total while six per cent of the medium farmers hold 31 per cent of the land.

The hike in inputs cost has not correspondingly led to an increase in productivity levels - the groundnut yield has come down from 1,611 kg a hectare (1994-95) to 1559 kg now. The production of chillies has come down from 1,831 kg to 1,795 kg.

The Andhra Pradesh Rythu Sangham leaders, B.Tulasi Das and S.Malla Reddy, point out that unless the Government evolves a comprehensive plan to tackle the market forces and ensure a minimum support price, the lot of the farmers will not improve. Without, adequate market linkages and improved irrigation facilities, along with a strict watch on the quality of seed and pesticides supply, it would be difficult for the farmer to tide over the crisis, they add.

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