Lopsided farm policy: The Hindu Business Line
Letters, The Hindu Business Line, January 3,2018
Lopsided farm policy
This refers to the excellent piece, ‘Agriculture market reforms are a must’ by A Narayanamoorthy and P Alli (January 2). The solution lies in a holistic approach to reforms. An example may bring out the glaring disparity. A bank takes deposits at an average cost of 8 percent per annum and ‘sells’ its product, namely ‘loan’, at 12 percent per annum. Today’s announcement by SBI about a cut of 30 basis points in its base rate makes a headline. No one talks about a farmer getting ₹4 a kilo of potato when a kilo of potato chips is sold at ₹400 a kilo, or when tomato prices are at a low of ₹5 a kilo at the farm gate, tomato ketchup is sold at ₹100 for 400 ml. Where do the margins go? When product prices go up, is it a crime for the farmer who produces the basic ‘raw material’ to expect a reasonable rise in prices of his produce? The farmer gets all the blame for his inability to repay loans when the real culprit is lopsided government policy.
Meanwhile, ‘cooperative federalism’ should not remain just a slogan. Ongoing consultations between Centre and States should evolve common minimum programmes bringing transparency in concessions and waivers where necessary and cross-subsidization of costs where unavoidable.