The Big Picture – Global agri products price crash: Impact on India

Summary:

• One of the less celebrated aspect for the last ten years or so, as far as India economy goes, was the revival of agriculture sector.
• The increased production and higher prices for farm produce has resulted in higher rural incomes. This had resulted in farmers’ rising incomes with Minimum Support Price reaching unprecedented levels.
• Even as farmers’ suicides were being reported in different parts of the country the agriculture export had zoomed from 7.5 billion US$ in 2003 to 42.6 billion US$ in 2013.
• However it is being predicted now that the agricultural prosperity may come to an end. It is because of steady slide in global crop prices, abundant inventory among other reasons.
• It is said that the declining global prices of agricultural commodities is having its impact on India also.
• The price decline is not equally distributed. With fruits and vegetables the prices are still quite high.
• India has been experiencing serious imbalance in production composition.
• The major commodities which have been affected are soya bean, rice, sugar and rubber.
• It is being said that it is no more economical to export the agricultural commodities as global prices are much lesser than the prices in India.
• The need of the hour is to increase productivity.
• The price decline is also said to be because of heavy subsidies provided by the developed world. And it is also said to be planned.
• India is taking a unique position in WTO. We have adequate and also surplus produce.
• The farmers should be paid proper remunerative prices and proper price system should be adopted.
• Our governmental policies are said to be defective and not supportive of farmers.
• Studies have also suggested that there is no real increase in the income of the farmers in the last few years.
• MSP regime has to be used judiciously. There is a need to relook at Export import regime.
• WTO regime has not benefitted all the countries equally.
• India has to become self sufficient in the production of pulses and edible oil seeds.
• Internal market reforms are also required.
• It is responsibility of the government to create favourable conditions for diversifying agriculture.