Government has steeply hiked the import duties on edible oils and ended the export curbs on pulses.
While these are intended to prop up prices, it is unlikely to benefit farmers.
Why wouldn’t it help farmers?
Farmers could have gained if these decisions were taken prior to the sowing season or ahead of the harvesting season.
But the bulk of these crops has already been harvested and disposed of by the growers at unremunerative prices.
Any rise in prices at this stage will largely benefit the trade and processing industry.
Notably, it’s not just oilseeds and pulses but most farm produces have been selling at below their minimum support prices (MSPs).
In some cases, prices have plummeted below production costs since last year’s bumper harvest.
Why have the prices nose-dived?
Government’s agricultural pricing policies are oriented largely towards managing inflation.
This attitude towards pricing is what resulted in the massive import of 5 million tonnes of pulses despite sufficient domestic production in previous fiscal.
Kisan Mukti Sansad, a coalition of 180 farm unions, observed that farmers stand to lose a minimum of Rs.36,000 crores annually, due to government’s pricing policies.
What is the way forward?
We need stable policies concerning agricultural pricing and trade, including imports and exports.
This is required to allow production to respond effectively to market demand and prices which doesn’t happen now.
Notably, several reports of the “Commission for Agricultural Costs & Prices” has emphasised this point.
In this regard, the government’s recent decision to evolve a formula to raise or lower duties on farm imports/exports based price benchmarks is a positive development.
