The record sowing during the Kharif season is likely to boost farm income, and eventually, support the agricultural economy amid the pandemic. Early indications show a healthy start to the procurement season that began in October, said a report by ICRA. While the bumper sowing kept the farm sentiments resilient, the same had to be supplemented by active procurement of rice at a minimum support price (MSP) by the government agencies to support farmer’s income, the report added. Paddy, being one of the most important staple crops in India, has seen a continuous rise in MSP over the years, growing at a CAGR of 6.8 per cent over the last decade.
Paddy procurement by government agencies
While the increased MSP is positive for farmers as it leads to improved price realisations and income for them, the benefits of the same are contingent upon the extent of procurement done by the government agencies. “Paddy procurement for Kharif 2020-21 is continuing smoothly in the procuring states & UTs with purchase of over 304 LMTs of paddy up to 24 November 2020, said the Ministry of Agriculture & Farmers Welfare. This is an on-year increase of 17.82 per cent against the last year corresponding purchase of 258.02 LMT. Out of the total purchase of 304 LMT, Punjab alone has contributed 202.38 LMT, which is 66.57 % of total procurement, the ministry added.
The government further said that about 27.18 lakh farmers have already benefited from the ongoing KMS procurement Operations with the MSP value of Rs 57,395.74 crore. It is believed that due to the improved income as well as policy support in the form of various government schemes like the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA), the PM-Kisan Samman Nidhi, and so on, the resilient and surging farm sentiments are likely to continue.
Food inflation weighing heavy on common man’s pocket
Meanwhile, the information on retail prices on a daily basis from the Ministry of Consumer Affairs, Food and Public Distribution (Department of Consumer Affairs) indicate that food price pressures that have persisted since the beginning of the financial year continued unabated in the month of October as well, barring prices of cereals, tomato and sugar, RBI said in its November bulletin. In particular, inflation-sensitive prices of onions and potatoes have ruled at unrelentingly high levels during the month, it added. Retail inflation grew at 7.61 per cent in October while food inflation rose at a humongous 11.07 per cent in the same duration.