Addressing farm distress in Assam

Farmers in Assam not getting remunerative prices for the paddy they grow is pushing the state into an agrarian crisis. Widespread rural distress looms large if the problem is not addressed before it turns critical. It is a paradox that paddy prices are falling in the state when Bangladesh, with which Assam shares a 262-km-long international border, has initiated the import of rice from India. Farmers engaged in agriculture and allied activities constitute 53 per cent of the total labour force in the state. The majority of them are marginal and small farmers with no resilience to withstand farm distress for consecutive years. As most farm families are provided highly subsidised rice under the government's welfare schemes, the demand for paddy or milled rice in the market has declined sharply. Against Minimum Support Price (MSP) fixed at Rs 1,868 for each quintal, the farmers have been compelled to sell at less than Rs 1,000 in most places. Private rice traders take advantage of poor paddy procurement by government agencies and lack of adequate storage facilities to bargain with ease and farmers are often made to sell at a much lower price than hardly covers their production cost. Only procurement by government agencies like the Food Corporation of India (FCI) or the Assam State Agricultural Marketing Board can ensure farmers getting the notified MSP on paddy. Assam produces more than 51.80 lakh metric tonnes of rice, but the Food Corporation of India (FCI) procured only 1.23 lakh MT in 2020-21. To put this in perspective, the FCI procured 135 lakh MT of rice in Punjab, 77 lakh MT in Telangana, 48.90 lakh MT in Odisha, 44 lakh MT in Uttar Pradesh, 37.89 lakh MT in Haryana, 23.40 lakh MT in Bihar and 15.64 lakh MT. It is an irony that Assam figures among the top ten rice-producing states and are ranked ninth in the list, but the FCI procured only 2.4 per cent of total rice production in the state. In sharp contrast, the FCI procures 84 per cent of rice produced in Chhattisgarh which ranks tenth among the top ten rice producing states with a total of 47.30 lakh MT production. The FCI receives a subsidy for procuring food grains from farmers at MSP and for storage cost for storing buffer stocks. The FCI has a high moisture content in paddy produced in Assam not suitable for storage behind low procurement. The solution to the problem has remained elusive due to the failure of successive governments in the state and at the Centre to provide scientific solutions to the farmers to keep the moisture content at an optimum level. The Assam government procuring from local farmers the rice needed for distribution of subsidised rice under different welfare schemes can be possible if the Central government agrees to it. Such a measure can ensure MSP to farmers while distribution will also be easier. The current norm is to lift the quota of subsidised rice from a central pool of custom milled rice made stored by the FCI. It depends on the capacity of the state leadership to convince the Central government about the need to make relaxation in the norm and allow the state to source the PDS rice from a state pool created through procurement of rice by ASAMB at MSP. Farmers in Assam suffer crop loss in multiple waves of annual ravaging floods or loss of agricultural land due to erosion. Coupled with distress selling, withdrawal from agricultural activities paints a bleak future of agriculture and the state economy. Farmers in many areas have reduced area under paddy cultivation after not getting remunerative price. This has led to many indigenous varieties of rice vanishing from the paddy fields. Until the FCI or the state agencies come forward to procure more quantities of paddy, diversifying paddy production to cultivating more indigenous and traditional varieties such as aromatic joha rice or traditional red rice, black rice having high export demand and fetch good price can be explored to prevent withdrawal from paddy production. Grooming entrepreneurs from farm families to take up production and marketing of rice-based delicacies can also help farmers gain from the value addition to rice instead of depending only on the marketability of paddy. Agriculture is the backbone of the state economy and farmers pushed to a distress condition triggers huge out-migration of the rural population. When purchasing capacity of farm families declines it also reduces the viability of industries manufacturing products eyeing the markets within the state. Distress in the agriculture sector also leads to distress selling of agricultural land and leads to an increase in the number of landless farmers which reduces many farmers having agricultural landholding to agricultural labourers. The crisis of farm distress in Assam is deeper than manageable by the mere optics of handing out cash through direct benefit transfer under various welfare schemes. Creative economic solutions are needed to address it.