Today, the prices of wheat, gram, and green gram and Udad dal are on a rise. One can witness the
political parties raising their voices against this rise. Farmers should get higher prices for their
produce; this is what the political parties ask for. But as soon as there is a possibility of getting
good prices in the market, they protest against it. This double- sided game has resulted in the despair
of our farmers. To say that, some farmers’ suicides are due to this deception by the political parties,
will not be exaggerating the case.
The government policies against the farmers have not changed then how is there an increase in the prices
of wheat, gram, and green gram and Udad dal? The Commission for Agricultural Prices and Cost announced
the support price of wheat at Rs. 750 per quintal for the 2006-2007 season. The support price of gram
is Rs. 1400 and for green gram, Udad and Toor dal’s is Rs. 1500 per quintal.
Today, in the market, mill quality wheat costs Rs. 950 to Rs. 1000 per quintal and Sarbati wheat costs
Rs. 1100 to Rs. 1400 per quintal. Gram costs around Rs. 30 to Rs. 35 per kg, green gram cost Rs. 30 to
Rs. 40 per kg and Udad dal costs Rs. 35 to Rs. 42 per kg. Toor dal costs Rs. 18 to Rs. 21 per Kg.
Pulses and other products like Toor dal and lentil prices have not risen significantly. This should be
taken into notice.
In a free economy farm produce import- export is also free. The Indian government has removed all
restrictions.
In the recent past, when a low in prices was experienced in the global market, an import duty was
announced on imported food grains. For example, there was an import duty of 50% on wheat, 80% on rice,
and 10% on pulses. But, against the background of rising prices of wheat and pulses, the government
has announced the removal of import duty of 10% and 50% from pulses and wheat respectively to 0%.
After this announcement, the increase in the prices in the market still exists.
What is the reason for this price rise?
The government intervention to stop the price rise in wheat
earlier is not currently possible. The Indian government’s sufficient stock of food was subsidised
under various schemes (e.g. Adivasi scheme, Employment schemes, Poverty line schemes etc.) and wheat’s
supply was increased. Due to this, wheat prices were the same for the last seven years and the farmers
of Punjab, Haryana, and Uttar Pradesh were not getting the support price and hence were forced to sell
their wheat to the government at support price. After seven years, since the market price of wheat was
higher than the government support price, the farmers have sold their produce to the traders.
The wheat stock reduced in the government godowns due to this decrease in purchase. The only one
consequence of this was the drop in government intervention. To increase government intervention, the
government announced import of wheat. In spite of removing the 50% import duty on wheat, why is there
still a rise in the in market price? Now the government is distributing imported wheat with subsidy
through Public Distribution System.
In the 2004-2005 seasons, Gram’s price was Rs. 1400-1500 per quintal and Udad was Rs. 1000 to 1200.
Green gram was 1500 to 1500 per quintal and Toor was Rs. 1800 to 2000. Import duty was 10%. Even then,
it was possible to drop the prices of these grains. Today, after withdrawing the import duty, why is
there still a rise in prices?
We are told that the reason of this price hike is the future market or speculative market. We are told
that it is also because multinational companies are buying wheat from Punjab and Haryana. This is based
only on an incomplete truth.
The real truth is that prices of all these things are on a rise in the
global market. Although traders are allowed to import without import duty, still the prices are on a
rise. In the global market, wheat costs more than 225$ a ton. This means imported wheat costs Rs. 1050
per quintal. This quality of wheat is not good; that is evident. These are the real reasons for the
price rise in the market.
The profound rise in Gram, Moong, Udad prices, not being the speculative market, is actually due to
the rise in the international market. The global market price is 640$ to 700$ per ton. This converted
to Rupees equals to Rs. 3000 to Rs. 3500. Before this the import was cheap. Therefore it was possible
to drop prices by importing. Due to the increase in prices it is no longer possible to do so through
import. Why is there a profound price hike in Udad and not toor?
In fact, after the removal of import
duty, Toor dal prices have decreased by Rs. 200 to Rs. 300. The reason is clear- import has become
cheap.
The political parties who claim that the price hike is due to speculative market; to them I have only
one question- why aren’t the prices of rice or soyabean rising? In Punjab and Haryana, very big
companies engage in contract farming of rice. Why are the prices still not increasing?
Big companies
like ITC are buying soyabean through e- choupals. Why didn’t the price rise then? Earlier at least in
the South there was no demand for the government to buy paddy at the support price. Why then, is every
state demanding it today? Why are Kerala and East Bengal and Chattisgardh demanding the same?
The answer to this question is that the prices of rice are not rising in the global market. Soyabean
prices are still low. There is sufficient stock of rice in the Food Corporation of India godowns.
Today’s price rise in the market is not because of speculative market but due to rise in price in the
global market and our country’s production being less. If our farmers produce more, we use that too
drop prices.
If the produce is less in the country and the prices start rising then we reduce prices
through import. After the implementation of the Fifth Pay Commission, the prices of petrol and diesel
rose and there was an economic growth of 8%. Against this background the farmer too needs more money
and for that there is an urgent need to increase the support price of grains, pulses, cotton and
agricultural produce. When are we going to admit this?
Recently, in a conference on the impact of the World Trade Organisation on agriculture at Delhi, I had
the opportunity to speak in front of Ex- Prime Minister Respected Mr. Vishwanath Pratap Singh,
Respected Mr. Bardhan, and Respected Mr. Prakash Karat. I said that Tata and Birla don’t produce
grains, poor farmers do. The poor should get food at a low price but to make that possible, why
should the food producers be kept poor? The answers to this question will solve the distress and
depression in agriculture.
Vijay Jawandhia is a widely respected farmer's leader and has been associated with Shetkari Sanghathana from its very inception, in Maharashtra. He has seen the new peasant movement in India from very close quarters, from the minds of the top leaders, to the minds of the ordinary farmer in India. He is based in Waifad, Wardha. He can be reached by email at : shetsangh@rediffmail.com