6
S
tate
of
I
ndia
’
s
L
ivelihoods
R
eport
2015
and marketing costs were not covered by
the minimum support price (MSP) fixed.
Further, in the absence of active procure-
ment in the state, farmers got much less
than the MSP (Table 1.4). The study also
commented that the cost calculations of
Commission for Agricultural Costs & Prices
(CACP) were understated and not realistic,
leading to lower MSP.
The Situation Assessment Survey of
Farmers
11
revealed that in five states, farm-
ers reported that the income was less than
their expenditure (Table 1.5). These were
averages across all classes of farmers. In case
of small farmers, the income pressure was
likely to have been higher.
The truancy of monsoon in the last two
years made farm-based livelihoods difficult.
The increasing suicides of farmers apart
from signalling high levels of distress in
some pockets of the country also put pres-
sure on the government. The aspects that
small farms will benefit most from will be
focus on water, productivity, risk mitiga-
tion and markets. While in the current year,
the Government of India (GoI) has made
irrigation a priority, the Rashtriya Krishi
Vikas Yojana (RKVY) has been put on the
back-burner. The crop-per-drop initiative
and optimising water use will go a long way
in improving agricultural production and
promoting cost efficiencies through better
input use. But transferring the National
Agriculture Development Programme
(NADP) to states may not result in positive
outcomes. Given the variability in imple-
mentation rigour and efficiency in different
states, support to agriculture might suffer in
a number of states. Crop insurance has not
been popular as it was not effective as a risk
mitigant. The weather-index based insur-
ance has been gaining some ground in recent
years, but still has a long way to go. Across
the country, crop insurance covers about
15 per cent of acreage and less than five per
cent of the value of crops produced. Instead
of focusing on the risks and access to viable
markets, money and effort is expended on
credit and other input supplies. Livelihoods
in agriculture require a value chain-based
approach that minimises risks with a market
orientation. There are locations, and crops
in which it had been possible to orient pro-
duction towards a market and thus stabilize
livelihoods.
Producer collectives as an option for
aggregating farmers and providing them
with complete solutions for input, technol-
ogy and marketing seem promising. The
pace of registration of producer companies
has increased in the last two years with
support from organisations such as Small
Farmers’ Agribusiness Consortium (SFAC),
National Bank for Agriculture and Rural
Development (NABARD) and a number of
promoting organisations. These institutions
have a long learning curve and attempts to
shorten the duration of learning will result
in failures. The support systems and initial
Table 1.4:
Profitability of paddy production in Andhra Pradesh
Year
Grade
Cost of
production (
`
/qtl.)
MSP proposed by
agrl. Dept (
`
/qt)
MSP fixed by
GOI (
`
/qtl.)
2008–09
Common
921
1,382
900+50 (Bonus)
Grade-A
963
1,445
930+50 (Bonus)
2009–10
Common
1,038
1,557
950+50 (Bonus)
Grade-A
1,093
1,640
980+50 (Bonus)
2010–11
Common
1,092
1,646
1,000
Grade-A
1,121
1,682
1,030
2011–12
Common
1,270
1,905
1,080
Grade-A
1,355
2,033
1,110
Source:
Pricing of Paddy, ACase Study of Andhra Pradesh by R.V. RamanaMurthy and RekhaMisra.
Table 1.5:
Deficit in income tomeet expenditure
State
Monthly deficit in income
to meet expenditure
Bihar
1,900
Tripura
1,500
Uttarakhand
1,000
Uttar Pradesh
1,300
West Bengal
1,900
Source:
Key Indicators of Situation of Agricultural
Households in India, NSSO 70th Round.
11
Key Indicators of Situation of Agricultural
Households in India, NSSO
70
th
Round, MoSPI,
December 2014.
