"A man should be
upright, not be kept upright."
—Marcus Aurelius (Roman,
121-180)
Word
for the day
Estival (adj)
Pertaining or appropriate to
summer.
Malice
towards none
After western music, Korean
Pop Bands are becoming increasingly popular with Indian youth and children.
This is one Make in India
battle we are certainly losing.
First random
thought this morning
In this post truth world
dominated by social media, Google and Wikipedia, politicians should be extra careful
while making claims and hurling accusations, especially when they rely on these
very tools to say what they are saying.
The effort should be minimize
one's digital footprints; cross verify whatever sensational material is
available online; and learn to distinguish between "truth" and
"post truth".
Silent truth
"The water in a vessel is sparkling;
the water in the sea is dark. The small truth has words which are clear; the
great truth has great silence."
—Rabindranath Tagore
—Rabindranath Tagore
To understand the politics of farm
loan waiver, it is important to first understand the economics of farming in India.
(a) As per 2013 NSSO survey about 83% (80% in 2003) of the total
farming households in India are either landless or marginal (holding less than
1 hectare or 2.47 acres cultivable land).
The total cultivable land in India
shrank to 92mn hectare in 2013 (average 0.6hectare per farmer household) from
107mn hectare in 2003 (0.72hectare per farmer household).
In 2013 the landless and marginal
farmers owned 30% of the total cultivable land in the country up from 23% in
2003. This is due to further fragmentation of the land, or lower conversion of
their land holdings.
(b) On the contrary, percentage of medium and large farmer household
(owning more than 4 hectares) shrank from 3.5% in 2003 to 2.17% in 2003. The
cultivable land owned by these medium and large farmer households shrank from
~35% in 2003 to 24% 2013. Many of these farmers actually do not cultivate land
themselves. They lease the land to landless or small farmers.
(c) From political perspective, 130mn farming households are marginal
or landless against just 3mn farmer households are medium to large land owners.
(d) The average cultivable land price in 50-100km radius of a city or
large industrial project is about Rs5lac/acre, It may though vary between Rs. 1
lac to Rs. 5crore/acre depending upon the location.
The crop on the land yields less
than Rs75000/year for a medium and large farmer. Assuming minimum 2 crops every
year, for a small and marginal farmer the yield is Rs25000 to Rs50000 per
acre/year, excluding the cost of self labor.
Pertinent to note here is that a
typical landless, marginal or small farmer household deploys 3-4 adults for 6
months in the farm. At ~Rs7000/month minimum wage rate the cost of self labor
itself comes over Rs1,50,000.
If we adjust the yield for one
crop loss every three year, lease rent and 18-24% interest that small and
marginal farmer pays, agriculture is mostly an unviable business.
If we factor in rising labor cost,
lower subsidy in input prices (fertilizer, electricity, diesel and water) and
slower rise in MSP, the viability gap will likely only increase going forward.
(e) A large majority of farmer households in India are landless or
marginal. Many of these farmers take land on lease. The rent varies from Rs5000/acre
to 50% of produce. A lost crop puts such farmers in a debt trap that may take
minimum 3years to get out.
Many of these farmers do
agriculture for sustenance. They grow wheat or rice for self consumption only.
Remember, the Gen X of these farmers
is no longer enamored by the feeling of Dharti Meri Mata Hai (my land is my
mother). The next generation of landless, marginal and small farmers is
therefore least likely to prefer agriculture over construction or industrial
labor. (Availability of agriculture labor is likely to shrink even further from
the current alarming levels).
(f) Given the low returns, the current generation of medium and large
farmers is also not much interested in taking up farming as occupation. Many
would want to sell the land if they get right price.
The problem however is that an
overwhelming proportion of land holdings have unclear or disputed titles.
Besides, finding a buyer for fragmented and scattered land parcels is tough. To
make the matter worst, in many areas the revenue rate (circle rate or ready
reckner rate) of land is much higher than the actual market price, making it
really tough to sell the land.
Also read the following
...to continue next week
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