For Farmers In The South, A Different Set Of Challenges

ꦆOn November 11, 2023, K. G. Prasad, a paddy farmer at Kuttanad in Alappuzha—known as the rice bowl of Kerala—died by suicide. The police found a suicide note that alleged that the government and the banks were responsible for his decision. The banks denied him a loan because of an unpaid Paddy Receipt Sheet (PRS) loan, which was mandated to be paid by the government. The PRS is a document given to farmers by the government after procuring paddy. The farmers can avail themselves of a loan from the bank, which is the price of the paddy that they had sold. This loan would be paid by the government later. Prasad’s suicide drew the attention of the public to the larger issue of non-payment or delayed payment of PRS loans by the government, which eventually lowers the farmer’s CIBIL score. 

While farmers in the north are protesting against the draft National Policy Framework on Agricultural Marketing, farmers in the south face a different set of challenges. States like Kerala and Tamil Nadu do not have mandis🅘, making the Agricultural Produce Market Committee (APMC) Act inapplicable. Instead, southern states have their own system for procurement and marketing of agricultural produce. In Kerala and Tamil Nadu, State Civil Supplies Corporations, operating under the government, handle the procurement of paddy and other crops. These corporations, along with various farmers’ cooperative societies and local self-collectives, play an active role in minimising exploitation by middlemen. 

𓂃The legal guarantee for Minimum Support Price (MSP) does not seem to be a major concern for South Indian states, primarily because they are not dominant players in the rice and wheat markets like Punjab and Haryana. In Kerala, 80 per cent of agricultural produce consists of cash crops. In Tamil Nadu, crops like maize, groundnut, and coconut occupy a significant portion of agricultural activity, alongside paddy. Paddy farming accounts for only 30 per cent of Tamil Nadu’s farmer population and 35 per cent of its gross cropped area. 

🔯“States like Kerala have been severely affected by the removal of tariff and non-tariff barriers under free trade agreements such as the ASEAN (Association of Southeast Asian Nations) and SAFTA (South Asian Free Trade Area). Our commercial crops, including rubber, tea, and coffee, were among the worst hit by the liberalisation policies implemented by the Union government,” says Thomas Isaac, economist and former finance minister of Kerala. According to the Kerala State Planning Board, the import tariff for tea and coffee was gradually reduced from 100 per cent to 45 per cent, and for pepper, from 70 per cent to 50 per cent, over a period of 10 years. 

MSP In Southern States 

🎃The Government of Kerala provides Rs 2,650 per quintal as MSP for paddy, reportedly the highest in the country, in line with the recommendations of the M. S. Swaminathan Commission. Recently, Kerala also extended MSP to 16 varieties of vegetables. However, the state government has been struggling to implement its own policies effectively due to a severe financial crunch. 

🐬The PRS system was introduced to ensure timely payment to farmers after procurement. Under this system, farmers can avail themselves of the amount as a bank loan, which the government is supposed to repay. However, delays in repayment by the government often push farmers into a debt crisis. 

🅘Erratic rainfall, rising temperatures, and extreme weather events further aggravate the challenges faced by farmers in the southern states. According to Jiju P. Alex, a member of the State Planning Board of Kerala, temperature fluctuations and irregular rainfall have significantly impacted the production of certain paddy varieties, reducing yields by up to 70 per cent. The production of commercial crops like pepper, cardamom, and turmeric has also declined by around 30 per cent due to climate change. These hardships are compounded by the government’s failure to effectively implement welfare schemes like MSP, leaving farmers in a deeper distress. 

According to the 2023 Economic Review,🎐 released by the Kerala State Planning Board, the state exhibits a decreasing trend in the share of the agriculture and allied sectors in its overall economy. The sector’s contribution to the total GSVA (Gross State Value Added) was merely 8.52 per cent in 2022-23, reflecting a decline from the previous year’s 8.97 per cent. 

Lack Of Awareness About MSP 

According to a report by the Tamil Nadu State Planning Commission, 68 per cent of agricultural households are unaware of the MSP provided by the government, despite two-thirds of these households reporting indebtedness. Data from the Central Food Grains Procurement Portal indicates a significant decline in paddy procurement in Tamil Nadu. In 2022-23, around 44.26 lakh tonnes of paddy were procured, whereas in 2023-24, the figure dropped to approximately 27.74 lakh tonnes, marking a shortfall of about 17 🧸lakh tonnes. Farmers predominantly sell their produce to private players rather than to government procurement agencies. The State Planning Commission attributes this to a lack of awareness about MSP, along with a decline in agricultural activity due to climate change. 

ꦓTamil Nadu is also showing trends similar to Kerala in moving away from an agriculture-based economy. Only 26 per cent of households in Tamil Nadu are classified as agricultural, compared to the national average, which is more than double that figure. Rapid urbanisation in Tamil Nadu, as in Kerala, has effectively blurred the urban-rural divide. These factors collectively contribute to the south’s relative indifference to the ongoing farmer struggles in the north. 

Better Focus, Better Schemes: Still A Long Way To Go 

🉐According to S. Narendra, an economist and columnist based in Bengaluru, the governments in southern states have given focus to agriculture and the welfare of farmers. “This emphasis was evident in the Karnataka budget presented on February 16, 2024, where agriculture received top priority. Key measures included the launch of special schemes under the Karnataka Raitha Samruddhi Yojane and the waiver of interest on medium- and long-term overdue loans from the District Cooperative Central Banks and the Primary Cooperative Agricultural and Rural Development banks, benefiting 57,000 farmers and facilitating the recovery of Rs 496 crore for the banks,” he explains. 

Additionally, Karnataka is establishing a dedicated Karnataka State Agriculture Development Agency, chaired by the chief minister, to oversee the implementation of agricultural policies, manage direct benefit transfers, and ensure the overall welfare of farmers. The state government had also announced a hike in MSP for paddy and ragi in 2024. Paddy would be procured at a rate of Rs 2,300 and ragi♓ at Rs 4,290, reflecting an increase from previous years. 

꧙On February 22, 2024, the Karnataka Assembly unanimously passed a resolution seeking legal guarantees for MSP, aligning with the farmer protests in New Delhi. Chief Minister Siddaramaiah also announced that the state government would enact a law to provide legal backing for MSP. 

🅺However, farmers in Karnataka face significant challenges. According to the National Sample Survey Office (NSSO) data, 70 per cent of farmers in the state are in debt, with a large proportion relying on informal lending sources. A report by the National Bank for Agriculture and Rural Development (NABARD) revealed that the average debt per agricultural household in Karnataka was approximately Rs 1.57 lakh in 2018-19, a figure that has risen over the years due to escalating farming costs. 

♋Like Kerala and Tamil Nadu, agriculture in Karnataka is predominantly dependent on marginal and small landholdings (87 per cent), which adversely affect farmers’ access to credit, markets, and technology. This, in turn, weakens the overall bargaining power of the farming community. There is a shift in cropping patterns as well. According to the Karnataka Agricultural Price Commission, the cultivation of paddy has come down by 36 per cent and that of sunflower by 81 per cent. At the same time, the cultivation of Bengal gram and soya beans has increased by 76 per cent and 106 per cent respectively. The farmer community in South India is sympathetic to their counterparts in the North but is not enthusiastic to participate for their own reasons.