Farmers fear steep rise in production costs

Farmers who have been facing steep rise in input costs in the recent times, are worried as steep escalation in fertilisers and transportation stare at them.

With Union Government making it clear on Thursday that it would stick to the ‘Rangarajan formula’ for the pricing of domestically produced natural gas, the agrarian community feels that it could give rise to the fertiliser prices especially the urea.

“The urea is presently distributed at a uniform selling price to farmers, with subsidy. But the end prices at which it is sold can go up once actual price of urea rises following a raise in price of natural gas, as the government will not be able to subsidise the increased price completely,” said K.C.M. Balasubramaniam, a former agriculture economist from Tamil Nadu Agricultural University.

Already, prices of many fertilisers like Di-Ammonium Phosphate (DAP) and Muriate of Potash (MoP) have gone up.

Farmers say that a bag of 50 kg of DAP that was costing a little over Rs. 500 three years back now costs Rs. 1,200.

Another major concern for farmers is the pressure from oil companies on the Government during the last few days to allow them to raise the prices of diesel further.

“Any raise on diesel price can make transportation of agriculture produces from farms to markets costlier. This will eat into the already thin-profit margins of farmers as prices cannot be raised correspondingly at the same level,” farmers say.

The diesel price increase will affect farmers who depend on diesel-run generators as alternative power source during power cut periods for pumping water to irrigate crops.

“To help farmers, the government should come out with good support prices for the produce that commensurate with the cost of production,” Mr. Balasubramaiam said.