& çâÌæÚUæð´ ·¤è ¥ôÚU Îð¹Ùæ ÁæÚUè ÚU¹ð´ ¥ÍæüÌ ¥ÂÙð ÜÿØ ÂÚU ŠØæÙ ÚU¹ð´Ð ãæÚU Ù ×æÙð´, €UØô´ç·¤ ·¤æ× ·¤ÚUÙð âð ¥æÂ·¤ô ©gðàØ ·¤è Âýæç# ãôÌè ãñ ¥õÚU ÁèßÙ ·¤æ ¹æÜèÂÙ ÎêÚU ãôÌæ ãñÐ ÖÜð ãè ÁèßÙ ×ð´ ç·¤ÌÙè Öè ·¤çÆÙæ§ü €UØô´ Ù ¥æ°, çÁ™ææâæ ¥õÚU ©ˆâæã ÕÙæ° ÚU¹ð´Ð ŠØæÙ ÚU¹ð´, ÜÿØ ã×ðàææ ¥æÂ·Ô¤ Âæâ ãôÌð ãñ´ çÁ‹ãð´ ÂæÙð ·Ô¤ çÜ° ÂýØæâ ¥æÂ ·¤Öè Öè àæéM¤ ·¤ÚU â·¤Ìð ãñ´Ð

WINDOW ON ASIA

A Farm Income Policy

Shahed Latif
***The fact remains that agro-processing industries of all kinds committed to give a fai return to farmers is the surest way to ensure a stable farm income in the long run without any state intervention.***
LAST week, I wrote about Jute price stabilisation fund In the light of the presenl depressed market for raw Jute. It is only one aspect of a farm income policy. There are many issues involved which call for detailed analysis.
First of all, we must establish the basis of a farm income policy. Why we need it? Farming is as old as civilisation itself and why only now. I am proposing government intervention In support of a set of measures and programmes which should ensure farmers, stable as well as remunerative returns on a continuing basis. As a result. farming should become profitable and farmers generate the surplus for on-farm investment. A policy of input subsidy and free irrigation cannot be the viable basis for agricultural growth in the long run
Farmers used to grow rice primarily for subsis tence consumption: while Jute is grown for a cash income This was the age-old pattern of agriculture in our country. This is however no longer the case The rapid commercialisation of agriculture in the recent past ought to be noted. Even as late as early 1970s, hardly 20 to 25 per cent of the paddy produced used to enter the market. The bulk of the output used to be processed by dehki and consumed within the homestead and also paid in kind as agricultural wages. It lias all changed now. The bulk of the paddy amounting to al most 65 per cent of the crop is now sold in the market for cash. Thus, from an output of 10 million tons, around 2.5 million tons used to
enter the market. Today output has doubled to 20 million tons and marketable surplus have enormously expanded by over five times
Cash returns from the production of paddy is now critically important to farmers. A farm gate price of 20 taka (per maund) more would Imply an additional gross income of Taka 700 crores to farmers If tne retail price of rice Is Taka 12 per kg in the Dhaka market (minimum), then the farm gate price of paddy, according to my estimates works out at Tk. 208/maund After allowing 30 per cent as the cash cost of inputs, the disposable income to farmers from paddy alone should have exceeded Taka 5,000 crores In 1996-97. Translated into demand for urban goods and services. the impact is obvious. Not only agriculture sector, the demand pull effect would have moved the entire economy at higher levels of productivity and growth. This is the basic dynamics of economic growth which though internal, is yet to be exploited. Paddy price support is only one out of several important programmes which should place farm income policy on a sound footing. Agro-processing is an important way to enhance the value added from agricultural commodities. At present, bulk of the paddy is processed Into rice by perhaps a million strong small husking mills where not only the extraction rate is wasteful, several important byproducts of rice are lost in the process Dheki is still worse in this respect. If the 13 millions tons of paddy entering the market is processed in modem rice mills then the extraction rate can be increased to as much as 70 per cent.
It would mean an additional 400.000 tons of rice from the same quantity of paddy. If exported, this quantity would earn 120 million US dollars. Not only that, rice bran oil to the tune of 160.000 tins and de-oiled bran cake — an excellent animal feed ingredient will also be available. The basis of an animal feed industry will be established and therefore large scale promotion of modem poultry farms will be feasible.
The modem rice milling will lead to better farm gate prices of paddy provided socially committed investment in agro-industries is made possible through fiscal incentives geared to this end and if the NGOs are given the opportunities to branch of into commercial ventures through easy credit and effective supervisory mechanism. In India. Amul dairy was established on this princi pie of providing remunerative prices to farmers
for their milk. Later on. profits generated by dairy processing and marketing utilised for dairy de velopment programmes Including setting up of cattle feed plants. Today, such cooperative milk marketing and processing ventures cover the entire country and India is one of the leading producers of milk in the world.
After milk, the cooperative principles have been applied for development of edible oil industry and in Irrigated rice-growing areas, cooperative rice processing ventures have also been successful. Cooperatives In our country constitute a sad story of business disasters.
Milk Vita was established to replicate the Amul model in Bangladesh. It did not make much headway since the bureaucracy In this country believed cooperatives to be an extension of themselves. They never could conceive cooperatives as profitable business enterprises. Since bureaucrats consider themselves to be the masters of everything — what else could be done? It 4s interesting to note that NGOs never picked up the cooperatives as the institutional mechanism — even by the longest barge pole.
At the same time, the fact remains that agroprocessing industries of all kinds committed to give a fair return to farmers is the surest way to ensure a stable farm Income in the long run with out any state in [ tervention. As a result, farm level investment will go up. productiv-| Ity will increase on a continuing basis and ever expanding supplies , of farm commodities will enable the agro industries to prosper. Following the Amul principles, not only paddy processing, but the basis of an intensive irrigated agriculture producing a well diversified range of farm products can be firmly established in our rural economy. Immediately, however, an agricultural prices commission on a permanent basis should tie established. It would be an independent commission — not under any particular ministry The responsibility of the commission will, among others. Include a) determination of farm gate prices of farm commodities well ahead of harvest time, b) Ensure wide publicity of those prices: c) Establish mechanisms for purchase of farm commodities at the determined prices; and. d) Suggest fiscal and other measures Including project financing In support of a lair (arm Income poll' 7
The announced prices must be effective in the thousands of rural markets. It is not an easy task but direct procurement by government-owned purchase centres is not the only way to fulfill the commitment. For example, easy financing for modem rice mills can be complimented by short-term borrowing for purchase of paddy. Committed private sector companies can do the Job. Entrepreneurs with political ambitions should be interested. If they can ensure a fair return for farmers paddy, a vote at the election time may be«assured. To any democratically elected government, a fair return to farmers should be a significant vote winner it will be argued that 50 per cent of the voters are landless. However, their income and employment is indirectly tied down to what land owning farmers secure at the market for their produce
Cooperatives are dead and gone. Therefore the prospects, of reviving the Amul model is likely to be an exercise in utter futility. 1 in particular feel very sad about it. since it was me who set up the dairy plants and the first group of cooperatives of Milk Vita. Instead. NGOs should have access to credit lines for promoting agro-processing industries. In return, they should ensure a fair and remunerative prices at the farm gate.
A farm income policy have many dimensions. It calls for thoughtful and investigative analysis and a beginning should be made within the next few months. Perhaps, the Centre for Policy Dialogue should take the initiative. Let us begin 'he discussion process to answer one big question: IIOW TO ENSURE A FAIR RETURN TO OUR HARD-.WQRKING FARMERS?