Vijendar Singh (55), who owns 5 acres of land in Bazida Jattan village of Haryana’s Karnal, used to spend about Rs 10,000 as input cost for per acre of wheat sown including seeds, raw material and labour in the year 2016-17 but now his input expenditure has doubled to stand at Rs 20,000. This is the case with hundreds and thousands of farmers across the states of Punjab and Haryana - who say that production costs have risen twice over the past few years.
Let’s begin with the prices for a bag of wheat seeds. While a 40kg bag of seeds for wheat used to cost anywhere between Rs 800-1200 per bag in 2016-17, the prices have now risen to Rs 2000 per bag.
The cost of DAP fertiliser has tripled, rising from Rs 450, to Rs 1350 per bag now. The prices for urea however, have remained the same due to government intervention as it continues to give heavy subsidies on the essential nutrient.
Labour costs too have doubled, say farmers, stating that the labour earlier took Rs 1500 per day for sowing, which has now risen to Rs 3200 per day.
Rents for machine use too have increased, due to a steep rise of prices for diesel. While the cost of diesel per litre was Rs 47 in 2015, it rose to Rs 65 in 2019 and currently hovers around Rs 95 per litre in 2023.
The average income of agricultural households in India was just Rs 10,218 per month in agricultural year (July-June) 2018-19 as per the latest Situation Assessment Survey for agricultural households that came out in 2019. The survey is conducted by the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation in a gap of every five years.
As per it’s earlier survey, the average incomes of farmers had been even low, standing at Rs 6,426 per month.
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Further dip in margins feared
While the small and marginal farmers with less than 5 acres of land were already struggling earlier with low incomes, they now look at a further squeeze due to this price rise, farmers across villages of Haryana including Jind, Karna and villages of Punjab including Bathinda and Patiala said while speaking with Moneycontrol.
They attribute this fall to the increasing input prices which have almost doubled in the past few years.
Input prices are the operating cost of materials a farmer buys which go into the process of sowing to reaping of his harvest. These include prices for seeds, fertilizers, pesticides, diesel, labour and rents for machines such as rotavators, trolleys.
Vijendar owns 5 acres of land, which has been passed down to him, generation from generation. On a good harvest season, when he can harvest about 60 mann (1 mann = 40 kilos) an acre and sell it at the current Minimum Support Price of Rs 2,125 per quintal, he earns a total of Rs 51,000.
Even then, his total profits dip to less than Rs 31,000 per acre of wheat sown. “For my 5 acre crop, which I reap for six months, I could have earned a maximum profit of only Rs 1.5 lakh. This is barely enough to sustain ourselves. This money is also used to sow the next harvest of paddy,” he says.
This comes in contrast to his earnings earlier on in 2016-17 when even though the MSP had remained at Rs 1,510, the farmer on a produce of 60 mann an acre, could earn a total of Rs 36,240 and save profits worth Rs 26,240. “The profits were low even then, but at least the value of money was more. We could buy much more in the same amount than we can now,” says Vijendar.
While farm subsidies such as on urea helped to some extent, farmers say more needs to be done.
With climate change wreaking havoc to the crop cycles the past three years, the output of crops has come down drastically for farmers.
“Our outputs on average have remained same the last 15 years, despite rising input costs. The recent hailstorm destroyed parts of my farm and I could only produce 40 mann an acre and earned only Rs 34,000 per acre of wheat sown. The profits, removing input costs, then trickle down to Rs 14,000 per acre for me,” he says dejected.
As per a 2017 report by NITI Ayog on ‘Changing Crop Production Cost in India’, that has analysed the cost of cultivation vis-à-vis the real crop output, the value of crop output during the year 2014-15 dropped to the 2006-07 level while the cost of cultivation increased rapidly.
The report concluded that the growth in output of the major field crops has remained inadequate to offset the rising cost of cultivation leading to a downward trend in the average net returns. In real terms, the net returns received by the farmers in 2014-15 were even less than the returns which they received ten years back in 2005-06, it said.
“Currently, wheat and paddy are being sown at a cost of about Rs 20,000 per acre, whereas labour intensive crops such as cotton are requiring about Rs 30,000 per acre. Price rise has also been significant for pesticides with an increase of over 60 percent in the past two years. This has been due to our dependence on China for the same where things have been uncertain since covid,” says Sanjay Gupta, MD and CEO, National Commodities Management Services Limited, a post-harvest solutions provider firm.
However, Gupta provides a differing view on price rise. He says, “Even though input costs have risen, the MSP has risen in tandem with it. The MSP over past few years has seen a rise of anywhere between 7-10 percent per year.”
But Indra Shekhar Singh, an independent agricultural analyst says that the price rise has to be looked at as a combined effect and not in isolation of any one thing.
He puts the blame on rising diesel prices which have caused a compound effect leading to a rise in price at every step of the way.
“Gains have fallen drastically as output fell. Weather disturbances have added to it. Cost of living has increased and inflation has hit every aspect of inputs. As a result, labour costs, logistic costs, freight costs have risen. Covid added to it as labourers went back home. So even though the farmer may be earning more in absolute numbers, he does not have the same amount of money he had before,” he adds.
The black marketing of DAP due to shortage in 2021 along with heat waves and pest attacks led to a downfall in growth, he says. “Thus, while cost of input has risen at every step, the output has seen a significant fall for an average farmer. This has been a cause for their added misery,” Singh concluded.
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Way forward
The reality of today is that India farms on chemicals, the costs of which are rising even as output goes down. The only way ahead is to find a transition plan and put it in action, says Singh.
A judicious use of fertilizers along with sustainable practices of agriculture is the only way via which cost of cultivation for farmers will dip. Natural farming methods, crop rotation practices and multilayer cropping will give the farming sector a boost, Singh adds.
Gupta suggests that the only way to make agriculture profitable is to make it eco-friendly for future generations. For that, farmers need to adopt sustainability, begin organic farming.
Agroforestry, says Gupta, is a method that needs to be widely adopted by Indian farmers as it helps in conserving environment, improve soil fertility, and provide additional income. This is done by integrating trees with crops and livestock.
Using water-efficient irrigation systems, such as drip irrigation and sprinkler systems, is another example of organic farming practices. These systems not only save water but also help to reduce the amount of fertilizer and pesticides needed, thus reducing costs for farmers.
Adaptation of technology such as use of Nano DAP and Nano Urea will help further, says Singh. However, he adds, that any technology adoption takes time and results of the same will only be visible in the next 5 years.
Meanwhile for Vijendar and several others like him, cropping continues to be a laborious task only to keep their sustenance going. “We work out farms day and night for months on loop. Mehnat bohot zada hai lekin fayda khatam ho chukka hai. Kare chale jaa rahe hain kyunki kuch aur nahi aata (The labour is too much but our profits have shrunk. We continue to do it because we do not know anything else),” he says to this correspondent.
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