Unseasonal rains have meant a spell of pleasant weather before a scorching summer. That’s an urban story. For the millions of farmers, weather must follow a pattern as crops do, and their lives follow the destiny of these crops. And farmers across the country did not want these March rains/ hailstorms as damage to rabi crops has been widespread.
The economic consequence is two-fold:
(1) Lower output of wheat, mustard and other rabi crops, damage to cash crop/ plantations like grapes means lower purchasing power in rural areas. This affects a variety of durables: from cycles to motorcycles, from replenishment to festive apparels, from a mobile phone to a DTH connection, from a DVD player to a television set, from small kitchen appliances to farm equipment; crop failure directly affects all planned purchases.
Sadly, for marginal farmers, a bad crop could sometimes mean a leaner grocery basket (FMCG goods), a cut down on impulse purchases (chocolates, ice cream etc) and in extreme cases, one less meal for the family.
(2) Lower or spoilt crop means higher prices of vegetables, wheat and packaged food items that use wheat/ mustard/ other crops like grapes as key ingredient. This affects us urbanites.
The cold statistics:
Output loss between 10-60 per cent across states in North, East, West and Central India has meant huge losses to thousands of farmers – standing crop, almost ready to be harvested, fell to the ground due to strong winds, rain and hailstorms. Of the 267lakh ha of wheat cultivation (rice cultivated across 448 lakh ha), and about 60 lakh ha of mustard cultivation, as much as 125 lakh ha has been affected (government estimates). That’s nearly 38 per cent of the land under rabi crop affected. In human terms, that could mean one in every three farmers affected.
I decided to visit a village and meet farmers as cold statistics did not mean anything without real human interaction.
From Gandhiji to Sri Sri Ravishankar, every one of our wise men has always said ‘India lives in its villages’. They didn’t mean 68 per cent of its 1.2 billion people live in villages; they meant India’s soul lives in its villages. We all trace our roots to a village, to the pristine natural environs of a place our forefathers called home. Sadly, even though a large majority of the 82 crore (68 per cent of India) villagers spend their lifetime farming; they contribute only 14 per cent to our economy (GDP). From 57 per cent in 1950 to 14 per cent in 2014, agriculture’s share of our growing GDP has been falling steadily. How has this transformed the life of an average farmer?
I visited Dera village on the outskirts of Delhi (bordering Faridabad and Haryana) to see it for myself. To begin with, there are few takers for farming here. This isn’t the story of villages bordering big cities. When my father/ his brothers studied in city colleges, they had no reason or intent of going back to our village. We looked around for a sharecropper (someone who would till the 15 acres of land in return for a share of the crops produced on the land) for a long time. There were very few able-bodied, willing and trustworthy men left in the village (most had gone to the nearby industrial center for jobs) and the final deal was a bad bargain. Back in Haryana, the farmers in Dera village are of two types – those that have 8-10+ acres of land and those that have 1-5 acres of land. Farming isn’t the only occupation to either – they have taken up jobs/ bought a vehicle for public transport/ opened a shop/ started a small business – as all of them say ‘farming has not been a profitable profession’.
Profit from farming has been directly influenced by:
- Input prices (seeds, fertilizer, irrigation, pesticide) that keep going up
- Cost of labour that rises every season – and rent on machinery not going down either
Banks wary of NPAs/ profitability – they raise loan eligibility criteria/ interest rates - Weather that has been erratic – more erratic than in the past
- Minimum Support Price (MSP)/ Procurement Prices at mandis – many issues with procurement
Farming is an enterprise with a P&L. However, the farmer has little control on his input costs and prices he can sell his produce at. When nature wreaks havoc, he does not have insurance to bail him out. The biggest concern is the unstructured market place that he sells to. While the central government announces a high MSP every season and state governments often add a bonus to it (to appease a large vote bank), the state machinery isn’t ready and capable to ‘support’ MSP in many states (especially in East and Central India). With the state/Food Corporation of India (FCI) purchase funnel not functioning smoothly, farmers are forced to sell in the open market place – at prices lower than MSP. This really is the biggest tragedy. With a well-managed state machinery, farmers in states like Punjab/ Haryana get good prices for their harvest, while in states like Bihar/ Odisha, traders/ middlemen rule the roost.
Farming depends very highly on weather. With advancement in weather forecasting and broadcast of this information (through TV, radio, internet, mobile phones), today’s farmers should feel more in control of their crops. However, on many occasions, random weather changes can damage standing crop/ crop that are harvested but not processed and is out in the open. Delayed monsoon affects all farmers dependent on rain water for their crop. In sum, despite advancement in weather prediction and communication of the same, farmers can do little if weather changes mid-season.
Harvest season, festivals and shopping:
Most of our festivals are around either the beginning or end of kharif/ rabi crop. The agrarian economy depends on harvest season as that’s the time the farmer gets his return on investment. With cash in hand, he typically purchases three kinds of items:
- Agri related – Pump set/ Tractor (with added loan)/ Agri equipment or ingredients (seed etc.)
2. Savings instruments – Rural folk save 30 per cent of their income – the vagaries of farming coupled with no welfare/ support by government keeps the average farmer eager to secure his future. KisanVikas Patra (KVP) and similar investment instruments at India Post, Nationalized/ Co-operative Banks are popular. - White Goods/ Home improvement – ACs, Washing Machines, Fridges are rare. Farmers invest in TV, cycle, motorcycle, mobile phones. Home improvements (construction/ modification/ painting/ plastering etc) are a significant investment.
Only a small part of his post-harvest cash goes into typically ‘urban’ purchases. Yes, he enjoys advertising as much as content as they open vistas to an aspirational/ magical urban world. But, his limited means help him access only a few categories well.
Brands that understand this world of his, stay close to him and build conversations beyond consumption. And when you understand his joys and miseries, you’ve made a friend (out of the simple-minded, God-fearing farmer) forever.
Author: Manas Mishra, Founder-Director, Mediant Communications. First Published: April 08, 2015 www.afaqs.com