The Narendra Modi government may have significantly hiked the minimum support prices (MSP) for kharif crops this year, pegging them at 1.5 times their estimated paid-out cultivation costs plus the imputed value of unpaid family labour.
But the move hasn’t resulted in higher plantings by farmers. The total area sown to crops in the current kharif season so far is not only 9.3 per cent lower than last year’s corresponding coverage, but also below that of 2016 and 2015. This is notwithstanding a normal monsoon, with the area-weighted rainfall for the country as a whole from June 1 to July 25 being just 2.8 per cent less than the long-term average for this period. It is true that the rains have been deficient in Uttar Pradesh, Bihar, Jharkhand, West Bengal and Assam, which has, in turn, led to progressive acreage under rice falling by over 22 lakh hectares (lh). However, rice/paddy accounts for only a third of the nearly 65 lh reduction in the overall kharif crop planting reported as on July 20. The accompanying table shows that the acreages are down even for pulses, coarse cereals, oilseeds, cotton and jute. In none of these — barring jute that is primarily grown in West Bengal and Bihar — could the monsoon have been a major impeding factor this time.
So, why have farmers planted less? One reason might be that the MSP announcement came quite late, on July 4. Farmers usually make sowing decisions before the monsoon’s onset, giving adequate time to arrange seeds of the particular crop/variety. For kharif MSPs to have the desired impact, the announcement should ideally be by early-June.
But a more important reason for lacklustre plantings may have to do with the low price realisations in recent marketing seasons. Having seen open market prices consistently rule below MSPs, farmers aren’t probably convinced of any real turnaround in fortunes.
It explains why arhar (pigeon-pea) area has shrunk in Maharashtra, Karnataka and Madhya Pradesh (relative to last year and even more vis-à-vis 2016, when prices were good). Urad (black gram) sowing has, likewise, been lower in MP, Rajasthan and Maharashtra. The only pulses crop whose acreage hasn’t slumped is moong (green gram). For farmers in the main growing states of Rajasthan, Karnataka, Maharashtra and MP, its key attraction is short duration — just 65-75 days, compared to 80-90 days for urad 160-180 days for arhar.
The lack of confidence in prices is also reflected in reduced planting of groundnut, sesame seed and bajra (pearl-millet). On the other hand, there seems to have been a significant shift in urad to soyabean in MP, Maharashtra and Rajasthan. Soyabean may have also gained at the expense of moong in Maharashtra, arhar in Karnataka and bajra in Rajasthan. Farmers are clearly seeing better price possibilities in soyabean and cotton. The prospect of the Chinese market opening up for Indian soyabean and tightening global cotton stocks should hopefully work in their favour. Farmers have also planted more maize — especially in Karnataka, MP and Maharashtra, which have had good rains — despite current market prices of around Rs 1,300 per quintal being lower than even last year’s MSP of Rs 1,425, leave alone the latest Rs 1,700.
Either way, MSPs don’t appear to figure in farmers’ calculations.