Last year, it was galloping onion prices that literally brought tears into housewives' eyes. At the moment, it is galloping prices of tomatoes, potatoes and
dal (once again) that have food consumers in a fix. Make no mistake. By the time Indians get ready to celebrate Dussera and Diwali later this year, galloping sugar prices will become newspaper headlines and heated TV debates. In the meanwhile, onion farmers have faced an existential crisis because they have barely managed to get even Rs one per kg for their output.
This has become an all too familiar story in India. On the one hand, farmers keep committing suicide because of huge debts that can never be offset by the poor incomes they earn. On the other, poor households across India that spend a hefty amount of the family budget on food items keep fighting a losing battle. Is there no solution to this seemingly never ending crisis?
There are solutions. But policy makers and governments, both at the central and state level, have been criminally negligent in implementing these solutions. The first is a crisis of poor productivity that widens the demand supply gap in a corrosive manner. This is best illustrated by the perpetual crisis related to dal or pulses. In 1970-71, the total food grain output was 108.4 million tons; the Green Revolution had started delivering. The total potato output was 4.8 million tons and the total pulse output was 11.8 million tons. By 2000-01, food grains output had almost doubled to 196.8 million tons. Potato output had leapfrogged almost four times to 22.5 million tons. And pulses? Well, despite three decades of Green Revolution, pulses output had declined to 11 million tons. Food grain output has since long crossed 250 million tons and potato output has crossed 40 million tons. But pulses output has not managed to even double in 45 years. If that is not monumental failure, God knows what is.
There is more. The per hectare yield for food grains was 872 tons in 1970-71. By 2013-14, it had crossed 2100 tons per hectare. Not very impressive compared to productivity gains in China but still a 150% growth. In 1970-71, the per hectare yield of pulses in India was 524 tons. In forty plus years since then, it had crawled up to about 750 tons per hectare. No wonder this gets reflected in other damning data. The per capita availability of food grains in 1971 was 417.6 grams. By 2013, it had grown modestly to 468.3 grams. Again, what about pulses? Per capita availability declined from 51.2 grams in 1971 to 41.9 grams in 2013.
If productivity and output growth in pulses had matched that of basic food grains, India would be producing more than 30 million tons of pulses a year. There would be no need to spend billions of dollars on pulse imports. How even this basic need cannot be met despite dozens of Agriculture research universities and institutions remains a baffling mystery.
The second is excessive and counter productive government controls. Sugar is a classic example of this. For almost two years, there has been no noise about high sugar prices. That's because record sugarcane and sugar production have resulted in supply far exceeding domestic demand. For example, sugar output last year was about 28 million tons while do,estimates demand ranges from 24 to 25 million tons. Sugar mills stopped paying money to sugarcane farmers claiming they were running losses. The government had to step in and actually come up with fancy schemes to encourage sugar mills to export even at a loss. Disgusted sugarcane farmers inevitably reduced sowing. So this year, sugar production would be just about 22 million tones while demand might be 26 million tons. No wonder that the government has imposed a 20% tax on sugar exports. But that won't help and sugar prices will rise with assorted ministers issuing dire warnings to hoarders and profiteers. Both sugarcane farmers and consumers will continue to suffer.
The third scandal is lack of access to markets and adequate storage facilities. This affects vegetables and other perishable food items in a vicious way. Today, India needs more than 42,000 mandis or markets where farmers can sell their produce. It has barely 7,000 and that too concentrated in a handful of states with an emphasis on rice and wheat. Does it really take more than 5 decades to create the basic infrastructure and markets for farmers? Twenty five years ago, the then government of India came up with a revolutionary "cold storage" policy. If enough cold storages are available, farmers don't need to sell perishable food items at distress prices. And consumers would not be victims of wild fluctuations in prices. It is possible to create cold storages. The cooperative milk revolution in India is a success to a large extent because milk can be stored. But nothing similar has happened in any other case.
And so the farce and the pain for farmers and consumers goes on and on.
