The present system suffers from
1. Corrupt Practices in Procurement system at the expense of the genuine farmer. It is mostly prevalent in Punjab Haryana belt.
2.Exploitation of the present system to carry out money laundering, by converting black money into legal money.
3.India is forced to increase grain stock far beyond demand. It leads to excess stock, wastage of grains due to temporary storage, and enormous funds locked up in stock and excessive inventory cost.
4. No initiative taken by farmers to grow essential food items like pulses and edibile oil seeds due to them preferring easy way to earn by growing only wheat and rice, whether need or not.
5. No interest and investment into agriculture to develop new technology which will lead to sustainable agriculture
In this message, I will deal only with the first two.
1.Corrupt Practices in Procurement system at the expense of the genuine farmer.
It is mostly prevalent in Punjab Haryana belt.
Pl read the following post on WhatsApp on this subject
Message on What'sapp on Farmers' agitation giving a factual account of what is happening currently in India
"I am still not clear about the issues involved in the Farmer's agitation. So, I asked a friend of mine, who besides engineering is a farmer from Abohar - Fazilka region of Punjab. Now, after retirement he is a full time farmer.
This is what he told me.
"I have been actively farming for almost two decades now and I have witnessed many things happen at APMC’s. (APMC is the Agricultural Produce Market Committee is a marketing board established by the state.)
I have seen classifications of C grade grain miraculously change into B grade grain.
Similarly I have also witnessed the weigh bridge weigh in the empty truck at 39 tons and the full truck at 55 tons and later found that the unloaded truck weighed 43 tons at another weigh bridge.
Yes I know, you know what I know. Yet, let me tell you more about what you may already know.
There are over 30,000 registered adtiyas (commissioning agents) in Punjab.
These 30,000 employ another 300,000 sub agents or sidekicks or people who wouldn’t have made it into doing anything anyplace were it not for the patronage network of these 30,000.
There are only 1500 farming villages in Punjab.
330,000 / 1500 is about 220 people on average per village doing the work of middlemen.
Why is this the case?
It’s a long story but someone needs to begin talking about this at some time.
We had a food shortage and a ship to mouth existence until the 1970’s.
Norman Borlaug pioneered a variety of wheat which gave 10 X the yield but needed 3X the fertiliser.
The Punjab was chosen as the battleground against hunger. Enterprising Sikh farmers worked hard to create what we know as the green revolution.
Since there were huge shortages, Laws were made which didn’t allow for stockholding or selling at farm gates.
Essential Commodities Act
APMC Act (farmers were compelled to sell only at APMC’s to licensed traders - remember license permit quota Raj?)
As an assurance to the farmer for his hard work. Minimum Support Prices were guaranteed.
No matter what the quantum, Sarkar would pick it up and provide farmers with a minimum amount as compensation per quintal or ton as the case maybe.
Getting money out of the sarkari treasury is a muck filled process. Thus was born the breed of middle men who walked the corridors of bureaucracy, government and worked corrupt sarkari babus.
political patronage networks flourished.
220 : 1 is the ratio of middlemen to a single village in Punjab today.
This business got integrated backwards.
Corruption was professionalised.
For instance, I have in my circle of influence or immediate family, folks who own very large tracts of land. (100 acre plus holding).
The thekedar comes and takes the theka of growing on the land. For those unfamiliar with the word, Theka it’s also referred to as contract. I know there are grumblings about corporates contracting with farmers directly now. I also know why. You should too.
Anyways; to cut a long story short.
Plenty Farmers do, not do much except receive their due at the end of each cropping season.
What is grown?
What grade or quality?
For how much is it sold?
Would it have fetched the similar price in the open market?
Where is it sold?
How is it sold?
Who’s the end beneficiary?
Does anybody consume it or does it go to waste?
Was there a better way to do what’s being done?
All the above is none of my business or yours.
As long as you receive your cheque.
Why do you care?
The Jamkhedkar committee meanwhile reports that over 40% of the grain acquired under MSP by FCI is either unfit for consumption or is simply wasted.
All Told, One out of every Two kilos acquired is wasted.
Years of perfidy have today given birth to this.
MSP has ensured that there is no necessity to seek profitable enterprise.
It’s also given birth to the patronage networks which survive off the sarkari treat and refuse to breakaway.
It’s given rise to a political class which thrives and survives of being Specialist Corrupt Thugs.
There was no sunset clause on this. Nobody foresaw a time of surplus production on food grains.
Result; all other states such as Haryana, UP, Bihar, Rajasthan & MP all produce surfeits of Grain. They also have their own MSP mechanisms which have proliferated and created similar political patronage networks.
Since more is acquired at Mandis in Punjab. Remember the central government promise. Grain from UP and or Bihar also finds its ways into the mandi system of Punjab.
The trucks being under weight and over paid for and the grades changing are common place practise, you can go for a few days to the mandi and figure out how to make a killing by doing this. I don’t advise it, this is what the system is current day. I advise, Try doing truthful clean work. It’s more fulfilling.
Soon enough, you’ll also be one of those “know it all’s” in the mandi who doesn’t talk to others. After all information is power.
All this is paid for by you dear tax payer.
The bill for procurement from both these states put together will be approximately nearly Rs. 75 Billions per annum
Why don’t the farmers grow something else.
Something more profitable.
If I’m being paid for doing precisely nothing.
Why bother with competing.
Where is the incentive to compete?
I would rather go and picket the roads leading into Delhi to ensure that the existing system isn’t threatened."
2.Exploitation of the present system to carry out money laundering, by converting black money into legal money.
Agriculture as they say, has been backbone of Indian economy, however some elements of our society have been using it to disguise tainted money and weaken the spine of our nation. Agricultural income is exempt from Income tax under Section 2 1a of Income Tax Act. Hence it is necessary to understand the meaning of Agricultural income. Income Tax act was amended to add agricultural income to total income for rate purposes.
Rent derived from land which is situated in India and is used for agricultural purposes
Income derived from land by agricultural operations including processing of agricultural produce
Agricultural land is not considered as “Capital Asset”, hence there is no Capital Gains tax on sale of agricultural land.
Even if there is forced/compulsory acquisition of land by Government (e.g highway expansion, railway track, etc); the compensation received for such acquisition is tax free.
Now, please read the following message in whatsApp
This is what I ‘learnt’ about the Agitating Farmers of India :
Many People may know or may not know this
Many farmers own lands very small (< 2-3 acres), small (5 -8 acres), medium (8-15 acres) & Big (>15 acres) have by & large leased their lands to APMC Syndicate, members on long term basis, in many towns.
Many lands are in the down shadow, of Bakhra Nangal Dam Canal tributaries !! The land yields 40-45 Quintals of Rice or + 55 Quintals of wheat per acre. This is based on Hundi system of making payment per crop season to Farmers, based on Land Records kept with Syndicate Members under Cooperative Loan scheme !! Farmers get Few 1000s as Loan based on Land Mortgage, from time to time + Crop Only Profit payments, per season!!
So Farmers get money without doing any physical job in field & while away their time in marriages & other responsibilities + Patiala Pegs & at times drugs too!!
Now who are these Syndicate Members in APMC town committee ??
Most of them are Politicians who literally Own APMC & Co-Op Bank - thru Mortgage also hold most of the Land records with them, on long term basis with EMI being released thru Seasonal Crop profit payments from time to time in a computerized mode basis !! Once the Loan amounts are returned, fresh loans again gets disbursed for continuity of Farm Land.
These Syndicate Members call labourers from UP, Bihar, Jharkhand, Chattisgarh on short term contract basis to till the Land for Paddy & Wheat crops (3- 4 months / crop) etc, & get the desired amount of Bags in Quintals per acre.
Now as per Intelligence Report 50% Bags are purchased thru APMC Govt MSP rate basis & other 50% are exported to other States or even out of INDIA.
As per IT returns, these Hundi owners (holding Land) show Crop Yield as 60 - 80 Quintals per Acre & account as Agricultural Income to get 100% IT waiver & thus convert black money into white money thru Crop Costs out of non-yeilded 40 Quintals / Acre (80 recorded - 40 actual) from100's & 1000's acres of Land in 3-seasons per Annum.
The bribe money i.e., Black Money is converted into White Money & also escape 100% IT thru waivers per Assessment Year.
Do U know how much 1000 acres land can provide 100% Tax rebate & yet also convert Bribe/Black money into White money ?? ₹30- 35 Crores / 1000 acres per annum. - for 50% of the cooked up number of 80 Quintals/acre.
Many Syndicate members own + 2500 to 5000 acres each, few even 10,000 acres thru Hundi system !!
Akali Dal chief BADAL owns 25,000 acres in different towns in Punjab & Haryana & earn ₹750 - 1000 Crs per annum, thru this Cooperative land approach !!
Note the advantages for BADAL family !!
a) ₹1000 Cr black money conversion every year.
b) Co-op. Bank running into + ₹5000 Crs per annum,Turn Over to maintain the Hundi System Alive.
c) Farmers get their produce 40 - 45 Quintals / Acre without any physical work - except over-supervising their own lands - thru Contract labourers from across neighboring States !!
Labours get paid by Syndicate members almost like Corporate Style..!!
Farmer owners get Loan Amount - as incentives with EMIs getting debited automatically thru Bank records.
Laborers are happy, as they get contract amount for 2 REAL crops + 50% of 3rd Crop (which may happen or may not happen- for Black money conversion) p.a.
Politicians are happy to own APMC Syndicate & Cooperative Bank & get all their Bribe Money into White Money & yet not pay any IT
SO ALL ARE HAPPY.
The central govt is trying to break this LINK as it is hitting Govt Exchequer/Treasury as under MSP, the Govt subsidiaries like FCI, Punjab Agro, SACG etc, lose 1000's of Crores thru forced purchase of Rice & Wheat every year & 20%-25% gets rotten due to non-use nor are they able to export.
THATS WHY THERE IS FARMERS PROTEST since 80 days, ONLY IN PUNJAB & HARYANA & few from Maharashtra !!...Ably supported by INC, AD, NCP with slush money for infrastructure on ROADS seen since last 2 months !!
It is possible for any one to say that the post is made to malign the farmer protest. However going through media reports on money laundering even five years back, I find it is true that there has been steady rise in the declared value of farm income as exempt income.
Report in Free Press journal in 2016
When a retired Income Tax (IT) officer – Vijay Sharma – decided to file an RTI (Right to Information) request for the amount that the department had registered as agricultural income. The figures he got showed an exponential increase from 2004 to 2013, touching a total of almost Rs 2,000 lakh crore for 6.57 lakh individual assessees in 2011. He then asked for the top 100 names of the people who had filed such returns. His request was denied. He then decided to file a public interest litigation (PIL) petition with the Patna High Court in Bihar. This matter was duly reported by media in March 2016. The court was supposed to hear the petition in April this year. But there is no further news from that front.
While one is not sure of the correctness of the figures in the report, one cannot miss the sudden steep increase in agricultural income reported in 2011and 2012 and subsequent drop. It reinforces the view this provision of “tax free income” is exploited by some people to carry out money laundering.
The fact that the farmer protest is carried out mostly by farmers from a couple of states and that they do not want to give a try or come out with alternative suggestions, sticking to their only demand of repeal of laws, reinforces the line of thinking mentioned in the WhatsApp post. Once the protest has started every interested group has joined and promoted it for its own benefit.
It is surprising to find why so far this aspect of “ money laundering “ has not been brought across the table in media discussions. It may be due to the fact that politicians from all political parties engage in these activities.
So Farmers get money without doing any physical job in field & while away their time in marriages & other responsibilities + Patiala Pegs & at times drugs too!!
Now who are these Syndicate Members in APMC town committee ??
Most of them are Politicians who literally Own APMC & Co-Op Bank - thru Mortgage also hold most of the Land records with them, on long term basis with EMI being released thru Seasonal Crop profit payments from time to time in a computerized mode basis !! Once the Loan amounts are returned, fresh loans again gets disbursed for continuity of Farm Land.
These Syndicate Members call labourers from UP, Bihar, Jharkhand, Chattisgarh on short term contract basis to till the Land for Paddy & Wheat crops (3- 4 months / crop) etc, & get the desired amount of Bags in Quintals per acre.
Now as per Intelligence Report 50% Bags are purchased thru APMC Govt MSP rate basis & other 50% are exported to other States or even out of INDIA.
As per IT returns, these Hundi owners (holding Land) show Crop Yield as 60 - 80 Quintals per Acre & account as Agricultural Income to get 100% IT waiver & thus convert black money into white money thru Crop Costs out of non-yeilded 40 Quintals / Acre (80 recorded - 40 actual) from100's & 1000's acres of Land in 3-seasons per Annum.
The bribe money i.e., Black Money is converted into White Money & also escape 100% IT thru waivers per Assessment Year.
Do U know how much 1000 acres land can provide 100% Tax rebate & yet also convert Bribe/Black money into White money ?? ₹30- 35 Crores / 1000 acres per annum. - for 50% of the cooked up number of 80 Quintals/acre.
Many Syndicate members own + 2500 to 5000 acres each, few even 10,000 acres thru Hundi system !!
Akali Dal chief BADAL owns 25,000 acres in different towns in Punjab & Haryana & earn ₹750 - 1000 Crs per annum, thru this Cooperative land approach !!
Note the advantages for BADAL family !!
a) ₹1000 Cr black money conversion every year.
b) Co-op. Bank running into + ₹5000 Crs per annum,Turn Over to maintain the Hundi System Alive.
c) Farmers get their produce 40 - 45 Quintals / Acre without any physical work - except over-supervising their own lands - thru Contract labourers from across neighboring States !!
Labours get paid by Syndicate members almost like Corporate Style..!!
Farmer owners get Loan Amount - as incentives with EMIs getting debited automatically thru Bank records.
Laborers are happy, as they get contract amount for 2 REAL crops + 50% of 3rd Crop (which may happen or may not happen- for Black money conversion) p.a.
Politicians are happy to own APMC Syndicate & Cooperative Bank & get all their Bribe Money into White Money & yet not pay any IT
SO ALL ARE HAPPY.
The central govt is trying to break this LINK as it is hitting Govt Exchequer/Treasury as under MSP, the Govt subsidiaries like FCI, Punjab Agro, SACG etc, lose 1000's of Crores thru forced purchase of Rice & Wheat every year & 20%-25% gets rotten due to non-use nor are they able to export.
THATS WHY THERE IS FARMERS PROTEST since 80 days, ONLY IN PUNJAB & HARYANA & few from Maharashtra !!...Ably supported by INC, AD, NCP with slush money for infrastructure on ROADS seen since last 2 months !!
It is possible for any one to say that the post is made to malign the farmer protest. However going through media reports on money laundering even five years back, I find it is true that there has been steady rise in the declared value of farm income as exempt income.
Report in Free Press journal in 2016
When a retired Income Tax (IT) officer – Vijay Sharma – decided to file an RTI (Right to Information) request for the amount that the department had registered as agricultural income. The figures he got showed an exponential increase from 2004 to 2013, touching a total of almost Rs 2,000 lakh crore for 6.57 lakh individual assessees in 2011. He then asked for the top 100 names of the people who had filed such returns. His request was denied. He then decided to file a public interest litigation (PIL) petition with the Patna High Court in Bihar. This matter was duly reported by media in March 2016. The court was supposed to hear the petition in April this year. But there is no further news from that front.
While one is not sure of the correctness of the figures in the report, one cannot miss the sudden steep increase in agricultural income reported in 2011and 2012 and subsequent drop. It reinforces the view this provision of “tax free income” is exploited by some people to carry out money laundering.
The fact that the farmer protest is carried out mostly by farmers from a couple of states and that they do not want to give a try or come out with alternative suggestions, sticking to their only demand of repeal of laws, reinforces the line of thinking mentioned in the WhatsApp post. Once the protest has started every interested group has joined and promoted it for its own benefit.
It is surprising to find why so far this aspect of “ money laundering “ has not been brought across the table in media discussions. It may be due to the fact that politicians from all political parties engage in these activities.
xxxxxxxxxxxxxxxxxxxxxx
My Response to Siva Kumar:
Big Mistake this assumption.
Farmers don't want the current system forever.
They definitely don't want the new laws as it is a retrograde step.
Went through both of your responses to my message containing Part 1 of my interpretation of the issue.
Before I start with Part 2, let me respond to your comments.
1. The farmers are protesting to retain the present system forever.
Big Mistake this assumption.
Farmers don't want the current system forever.
They definitely don't want the new laws as it is a retrograde step
My statement is not an assumption. It is deduction. The protesting farmers do not want the new laws. They are however not willing to discuss which provisions in those laws are not acceptable and why. They are also not offering any alternative proposal. The only thing they are repeatedly stressing is that the new laws should be repealed. Their perceived fear is that they will be wiped out. The only conclusion one can arrive is that the protesting farmers want to continue with present set up and do not want any change.
I wrote:
2. Of course the system is corrupt. No denying that. So why does not the Govt go after corrupt Govt Babus controlling APMCs use CBI and put them behind bars ? No that they will not do.
Corruption is universally spread. Politicians from all parties are involved in this system which is 50 years old. I would to refer to the notorious “Muster Roll” scam involving crores of rupees by showing payment to imaginary workers in Chennai Corporation in ‘70s. The culprits were from all political parties including leftists. You must have heard about the famous phrase of “Scientific Corruption" coined by Sarkaria commission which probed into corruption charges against DMK government in 1970’s to describe how cleverly the culprits could escape law.
It took nearly 70 years to plug a loophole in tax evasion through VPF Voluntary Provident Fund. Salaried employees invest in EPF (Employee Provident Fund) 12% of salary. The employer provides equal amount to his EPF. In addition, employee can also invest additional amount through VPF, but there will be no contribution by employer to this. The loophole provided was not to fix upper limit of amount invested in VPF. Entire interest at around 8% is tax free. The highest balance in case of one individual salaried employee is 103 Crores. Now read the news item on government fixing this problem by limiting the amount to Rs.2.5 lakhs to avail tax free facility. Any investment above this will attract tax..
" Amid criticism over the proposed tax changes for those contributing over Rs 2.5 lakh annually towards provident fund (PF), the government on Thursday said 1.2 lakh subscribers - which is less than 0.3% of the 4.5-crore base - were contributing "huge sums". Official sources suggested the benefit of high tax-free returns was accruing to high net worth individuals (HNIs) although PF was meant for workers. Among the HNIs, one individual with a balance of Rs 103 crores in his PF account has the highest corpus, followed by one holding Rs. 86 crores. Sources said that the top 20 HNIs have about Rs 825 crore in their accounts, while the top 100 have a balance of over Rs 2,000 crore.
Overall, HNI account holders had an average corpus of Rs 5.9 crores. They had average earnings of Rs 50.3 lakh annually - and tax-free under the current dispensation. In all, there are around 4.5 crores employees provident fund contributors and the high net worth individuals chip in with about Rs 62,500 crore to the provident fund kitty, a finance ministry source said. "The government has now done away with this disparity of paying huge sum of tax-free interest to HNIs at the cost of honest average salaried class contributor and taxpayers,"
The only way to prevent all around corruption and malpractice is to design a system which will make it easy to track and fix the culprits. Later I will explain how the new law will take care of it.
2. Of course the system is corrupt. No denying that. So why does not the Govt go after corrupt Govt Babus controlling APMCs use CBI and put them behind bars ? No that they will not do.
Corruption is universally spread. Politicians from all parties are involved in this system which is 50 years old. I would to refer to the notorious “Muster Roll” scam involving crores of rupees by showing payment to imaginary workers in Chennai Corporation in ‘70s. The culprits were from all political parties including leftists. You must have heard about the famous phrase of “Scientific Corruption" coined by Sarkaria commission which probed into corruption charges against DMK government in 1970’s to describe how cleverly the culprits could escape law.
It took nearly 70 years to plug a loophole in tax evasion through VPF Voluntary Provident Fund. Salaried employees invest in EPF (Employee Provident Fund) 12% of salary. The employer provides equal amount to his EPF. In addition, employee can also invest additional amount through VPF, but there will be no contribution by employer to this. The loophole provided was not to fix upper limit of amount invested in VPF. Entire interest at around 8% is tax free. The highest balance in case of one individual salaried employee is 103 Crores. Now read the news item on government fixing this problem by limiting the amount to Rs.2.5 lakhs to avail tax free facility. Any investment above this will attract tax..
" Amid criticism over the proposed tax changes for those contributing over Rs 2.5 lakh annually towards provident fund (PF), the government on Thursday said 1.2 lakh subscribers - which is less than 0.3% of the 4.5-crore base - were contributing "huge sums". Official sources suggested the benefit of high tax-free returns was accruing to high net worth individuals (HNIs) although PF was meant for workers. Among the HNIs, one individual with a balance of Rs 103 crores in his PF account has the highest corpus, followed by one holding Rs. 86 crores. Sources said that the top 20 HNIs have about Rs 825 crore in their accounts, while the top 100 have a balance of over Rs 2,000 crore.
Overall, HNI account holders had an average corpus of Rs 5.9 crores. They had average earnings of Rs 50.3 lakh annually - and tax-free under the current dispensation. In all, there are around 4.5 crores employees provident fund contributors and the high net worth individuals chip in with about Rs 62,500 crore to the provident fund kitty, a finance ministry source said. "The government has now done away with this disparity of paying huge sum of tax-free interest to HNIs at the cost of honest average salaried class contributor and taxpayers,"
The only way to prevent all around corruption and malpractice is to design a system which will make it easy to track and fix the culprits. Later I will explain how the new law will take care of it.
I wrote:
3. Also I think it is a joke that a country with 1.3 billion mouths to feed has excess food grains stored. So you are telling me people are not starving in Indian villages. I know villagers who still can afford to drink only Kanji in the mornings.
Both of us are right. The country is making more food grains than required as per nutrition norm to cover entire population. Unfortunately, it does not reach all the needy people. No one is sure how much is wasted and become defective due to poor storage in open ground.
The move in current year explains how the much needed grains go to wrong persons. In Tamilnadu through PDS the government gives is free 20 kgs of rice every month to every family having rice card. These card holders are considered as people below poverty line. The sugar card holders get more sugar at subsidy but no rice. 2021 being an election year, the government allowed every sugar card to be converted to rice card Around six lakh sugar holding families have shifted to rice card.
3. Also I think it is a joke that a country with 1.3 billion mouths to feed has excess food grains stored. So you are telling me people are not starving in Indian villages. I know villagers who still can afford to drink only Kanji in the mornings.
Both of us are right. The country is making more food grains than required as per nutrition norm to cover entire population. Unfortunately, it does not reach all the needy people. No one is sure how much is wasted and become defective due to poor storage in open ground.
The move in current year explains how the much needed grains go to wrong persons. In Tamilnadu through PDS the government gives is free 20 kgs of rice every month to every family having rice card. These card holders are considered as people below poverty line. The sugar card holders get more sugar at subsidy but no rice. 2021 being an election year, the government allowed every sugar card to be converted to rice card Around six lakh sugar holding families have shifted to rice card.
Now, free rice is given even to families whose monthly income is one lakh and above. In addition they got Rs.2500/ plus package of grocery including sugarcane to celebrate Pongal. The poor who do not have ration card are denied everything. Getting a ration card itself is often a process involving pay off to some official or party functionary.
Continuing with my narration of deficiencies of present set up in this Part 2, you may find below three more areas of concern.
3. India is forced to increase grain stock far beyond demand. It leads to excess stock, wastage of grains due to temporary storage, and enormous funds locked up in stock and excessive inventory cost.
4. No initiative taken by farmers to grow essential food items like pulses and edibile oil seeds due to them preferring easy way to earn by growing only wheat and rice whether need them or not.
5. No interest and investment into agriculture to develop new technology which will lead to sustainable agricultur
On the Grain procurement front, there is much more serious issue faced by India than the prevailing leakage of funds and exploitation by middlemen. As mentioned earlier, the APMC Act was and MSP (Minimum support Price system and procurement by FCI (Food Corporation of India) were introduced in 1960’s when there was a serious shortage of food. After the Green revolution and successive increase in area of cultivation across the country, the grain production went up. Since last few years, we have become surplus in in production of food grains. Continuing the old system now will lead to a total breakdown in future.
The picture below gives the overall situation at macro level.
(Following the nutrition norms as per ICMR-NIN figures published in text book)
1
2
3
4
5
4-5
Based on 2019-20 Data
Total Production
(Million Metric tonnes)
Total Consumption per year MMT
(Million Metric tonnes)
(Calculated Value)
Calculated figure of increase in Excess stock
In a year
Actual Excess what is reported by FCI as increase in buffer stock
Wastage of Food Grains in a year
Wheat
109
57
Rice (Paddy)
118
121
Total Qty of grains
227
178 MMT
Plus 10MMT of rice exported to make it 188 MMT
39 MMT
14 MMT is shown as increase in buffer stock in a year as per record
25 MMT
.The basis for arriving at consumption figures has been given separately at the end. Other figures are taken from Government’s statistics.
The total quantity of grains is what we have to look as the consumption figures of rice / wheat may be more at the expense of the other in actual practice.
In the above table, calculated value of increase in stock in a year is 39 MMT as against 14 MMT shown as actual increase in stock in one year. It may be noted that the loss of grains in storage has not been considered in the above calculation. Also there could be added stock in states not covered by FCI.
What is important is not the actual data but the trend of excess of production over consumption. The following graph will show the alarming trend.
Continuing with my narration of deficiencies of present set up in this Part 2, you may find below three more areas of concern.
3. India is forced to increase grain stock far beyond demand. It leads to excess stock, wastage of grains due to temporary storage, and enormous funds locked up in stock and excessive inventory cost.
4. No initiative taken by farmers to grow essential food items like pulses and edibile oil seeds due to them preferring easy way to earn by growing only wheat and rice whether need them or not.
5. No interest and investment into agriculture to develop new technology which will lead to sustainable agricultur
On the Grain procurement front, there is much more serious issue faced by India than the prevailing leakage of funds and exploitation by middlemen. As mentioned earlier, the APMC Act was and MSP (Minimum support Price system and procurement by FCI (Food Corporation of India) were introduced in 1960’s when there was a serious shortage of food. After the Green revolution and successive increase in area of cultivation across the country, the grain production went up. Since last few years, we have become surplus in in production of food grains. Continuing the old system now will lead to a total breakdown in future.
The picture below gives the overall situation at macro level.
(Following the nutrition norms as per ICMR-NIN figures published in text book)
1
2
3
4
5
4-5
Based on 2019-20 Data
Total Production
(Million Metric tonnes)
Total Consumption per year MMT
(Million Metric tonnes)
(Calculated Value)
Calculated figure of increase in Excess stock
In a year
Actual Excess what is reported by FCI as increase in buffer stock
Wastage of Food Grains in a year
Wheat
109
57
Rice (Paddy)
118
121
Total Qty of grains
227
178 MMT
Plus 10MMT of rice exported to make it 188 MMT
39 MMT
14 MMT is shown as increase in buffer stock in a year as per record
25 MMT
.The basis for arriving at consumption figures has been given separately at the end. Other figures are taken from Government’s statistics.
The total quantity of grains is what we have to look as the consumption figures of rice / wheat may be more at the expense of the other in actual practice.
In the above table, calculated value of increase in stock in a year is 39 MMT as against 14 MMT shown as actual increase in stock in one year. It may be noted that the loss of grains in storage has not been considered in the above calculation. Also there could be added stock in states not covered by FCI.
What is important is not the actual data but the trend of excess of production over consumption. The following graph will show the alarming trend.
FCI is burdened with stock of 80 Million Metric Tonnes of grains and this figure will increase every year by around 14 MMT as per their estimates. Every year FCI is trying to reduce procurement but unable to do so.
To quote from the report by Ashok Gulati
“The estimated economic cost of rice in 2020-21 is Rs 37,267/tonne and that of wheat is Rs 28,838/tonne. Even if one takes a conservative and lower ballpark figure of Rs 30,000/tonne for simplicity as the combined economic cost of rice and wheat, the value of this “excessive stock”, beyond the buffer norm, is Rs 1,50,000 crores. FCI will keep incurring unnecessary interest costs of about Rs 8,000-10,000 crores per annum.
The CTC (cost to company) of departmental labour of the Food Corporation of India is six to eight times higher than contract labour in the market. No wonder, market prices of rice and wheat are much lower than the economic cost incurred by the FCI. In Bihar’s rural areas, for example, one can easily get rice in the retail market at Rs 23-25/kg. The bottom line is that grain stocks with the FCI cannot be exported without a subsidy, which invites WTO’s objections. The real bill of food subsidy is going through the roof but that is not reflected in the Central budget as the FCI is asked to borrow more and more. The FCI’s burden is touching Rs. 3 lakh crores. We are simply postponing a financial crisis in the food management system."
It is not clear why the government and experts are not presenting this future scenario to the farming community. May be farm laws are the first step and gradually farmers will realise the futility of producing higher stock of grains than needed due to open trade. It will lead to smooth changeover to a competitive profit and productivity oriented approach by the farmers.
I plan to cover the following two deficiencies of present system in Part 3 of my message.
4. No initiative taken by farmers to grow essential food items like pulses and edibile oil seeds due to them preferring easy way to earn by growing only wheat and rice whether need them or not.
5. No interest and investment into agriculture to develop new technology which will lead to sustainable agriculture
Meanwhile you write to me the negative aspects which you consider as harmful and retrograde.
xxxxxxxxxxxxxxxxxxxxxxxx
PART 3
In Part 3, I promised to cover the following two areas.
4. No initiative taken by farmers to grow essential food items like pulses and edible oil seeds due to them preferring easy way to earn by growing only wheat and rice whether need them or not.
5. No interest and investment into agriculture to develop new technology which will lead to sustainable agriculture
My review of a article sent by Nacha covered the above two subjects. I am attaching the same for your study.
Now request you read the following after a break
Of the Indian population of 135 crores nearly 70% is covered through PDS. It means 70% of demand of food grains will be eventually met by government procurement and distribution through ration shops. No private unit will take this job as there is no income in it for them. They will have to buy at MSP and incur cost of procurement and sell it to government at very little margin. It will never happen. The remaining 30% of demand too is scattered nationwide and after absorption of transport cost, it is difficult to sell in open market. In relation to food grains, both MSP and procurement by FCI will continue for more than a century if not for ever. Only government can absorb all costs and feed the entire country. PDS is an area which is cautiously looked at by every government to remain power. Hence there need not be any fear of corporate companies taking over in the segment of basic grains of wheat and rice, driving out the farmers.
The Corporates can however enter in the area of value added niche products like horticultural crops and fruits extending to cold storage and food processing industry, organic farming, hydroponics, SRI method of growing rice crop and vegetables bringing in technology and investment. Both the corporate and farmers will prosper and consumer will also be benefitted because of better quality.
Experts from abroad who published articles on Farm Protest may not be aware that Maharashtra state introduced similar farm reform laws in 2006. There had been no protest while introducing the change. Even today we find that the farmers there have not been driven out. Both Corporates and farmers co-exist without major conflict. APMCs continue to record a turnover of ₹48,000 crore and remain preferred by farmers as they offer price protection. On the other hand, the alternative system with corporates too, has gained ground, with an annual turnover of ₹13,000 crore. The private participation is mainly interested in working with fruits and seeds.
Bihar too went in for farm reform in 2006 but unlike Maharashtra, they made the mistake of abolishing Mandis straightaway expecting farmers to indulge in direct sale right from the first year. With over 95% being marginal farmers, farming is source of livelihood and not money making business. Abolition of mandis did not affect them as their produce just met their family requirement. The rest, since there was no storage facility, sold their produce at distress value and became poorer. The private corporates had not entered the fray. The positive aspect was that there was no avenue for corruption and money laundering (Ref: Article in the standard Magazine” Down to Earth”):
The above two examples show that the farmers will not be swallowed by the corporates and also that corporates are also not keen to enter grain segment having low potential for profit and growth.
It is with this background, one must question why farmers from Haryana Punjab belt who contribute less than 20% of procurement of grains by FCI are alone in the forefront of Farmer Protests
Fear of being run over by Corporates as alleged is not real as explained above, fortified the example of Maharashtra and Bihar.
The real reasons for Farm Protest, as I repeat again, are related to missing out of avenues available for corruption and money laundering by those who exploit them. They are misleading innocent farmers, and escalating the protest with only demand of repealing the new farm laws. They were nowhere in the picture when Maharashtra introduced similar laws and Bihar abolished Mandis, both in 2006. Now, the opposition parties and other groups are jumping in the fray with their agenda in mind. It is like Kurukshetra war where every king with his army joined Pandavas or Kouravas to fight his enemy who has joined the other group.
In the entire discussion I have mostly focused on food grain sector and fallacies spread by protesting farmers. There is however a great potential for corporate entry with investment and technology to develop cold storage and food processing industry to produce value added products which will definitely increase the income of the farmer. It will not happen overnight but a beginning has to be made. The immediate benefit of new laws will come through the easy tracking of corruption and money laundering currently prevalent in food grain procurement leading to their elimination.
I leave the last word to you. As there is a gulf between your ideological stand and my independent neutral analytical approach, I request that this discussion be brought an end after receiving your reply.
With best wishes,
-A.Sivakumar
(’68.B.Tech.Mech.IITM)
Basis of calculation of requirement of Rice and Wheat for India's Population
Milled Rice Yield from Paddy Rice 70%
Population Spread; Adults : 95 Crores
Children 5 to14 years of age: 27 Crores
Children below 5 years and below: 13 Crores
Figures of population and Production of wheat and rice were taken from government records.
(Following the nutrition norms as per ICMR-NIN figures published in Hand book)
Ref: Hand Book of Food and Nutrition compiled by .M.Swaminathan
Basis of calculation of requirement of Rice and Wheat for India Population
Milled Rice Yield from Paddy Rice 70%
Population Spread; Adults : 95 Crores
Children 5to 14years of age: 27 Crores
Children below 5 years and below: 13 Crores
Figures of population and Production of wheat and rice were taken from government records.
(Following the nutrition norms as per ICMR-NIN figures published in Hand book)
Ref: Hand Book of Food and Nutrition compiled by .M.Swaminathan
Basis:
Total Grains needed
per Man’: 400 grams/ Day
per Woman:300 grams/ day
Based on Male Female ratio of 108:100
Weighted Average of consumption = (400*108/200)+(300*100/200) = 366 grams/ Day or 11.0Kgs/Day
Subtracting other grain like jowar, consumption of wheat plus rice per person per month =10.5kg or 126 kgs/ year
Population Spread; Adults : 95 Crores
Children 5to 14years of age: 27 Crores
Children below 5 years and below: 13 Crores
Consumption pattern is assumed at the ratio of 1:0,5:0,25 for these three groups of population
In addition, a ratio of Rice and Wheat consuming population at 60:40 has been considered by going through various statistics.. Any change in assumption here, however does not alter much the final conclusion.
XXXXXXXXXXXXXXX
17th Feb 2021
Siva Kumar,
I have been giving this Farmers Protests serious consideration.
Putting Politics aside there is an urgent need for a solution that protects the small farmers who are naturally poor as their small piece of land does not have any potential for growing their incomes.
These people will either sell their land for pittance to greedy rich men or end their lives and commit suicides. My own cousin has a piece of land about 3 acres and it is just lying idle as he cannot even afford the labour costs to get people to cultivate on top of which costs of fertilisers power and water plus quality grains to plant... Just not affordable.
You say all APMCs are State Controlled. I am looking for a map showing BJP Controlled States in 2021 but cannot find one.
I am also looking for facts on farm size and related agricultural output.
Do you think BIG farm owners like the Zamindars are the main culprits heading the farmers protests ?.
What Percentage of Farmland come in the over 5 Acres Category ?
Hello Ram,
Let me furnish the figures needed by you which I collected from Net.
1. Map on States Under BJP Rule ( We have to add Madhya Pradesh ( won in second half of 2020) under BJP Rule in the map of Jan 2020) I hope we do not discuss this topic, as I prefer to confine myself to non political topics.
2.Clarification on your statement
You say all APMCs are State Controlled.
I never said APMCs are controlled by state. Those in Punjab Haryana Belt are perceived to be dominated by politicians with vested interests, leading to malpractices like corruption and money laundering. They do not want to lose their avenues of income and are against change in the present system.
3. Information on land holding
No of Holdings refers to number of land owners. These figures from Agriculture Pccket Book published by Govt of India. The figures are based on Agri census taken every ten years.
As per the chart
In 2001,
754.08 lakh marginal farm land owners have land less than one hectare(i.e less than 2.47 Acres) as against total of 1119.93 lakh of total land owners in the country with total land holding of 1594 lakh hectares.
In 2011,
928.26 lakh marginal farm land owners have land less than one hectare(i.e less than 2.47 Acres) as against total of 1383.48 lakh of total land owners in the country with total land holding of 1596 lakh hectares.
To answer your question
What Percentage of Farmland come in the over 5 Acres Category ?
The answer : In terms of land area, Percentage of Farmland over 5 Acres was 61.2% in 2001 and came down to 55.4% in 2011.
However in terms number of land holders, Percentage of those with over 5 Acres was 18.2% in 2001 and it went down to 15.0% in 2011.
Pl note that though the land holding may be more than two hectares, quite often it will be scattered in different areas around the village.
There is no relative figure of production in each category. In my view the size does not play major part in determining low yield. Tractors and farm machinery have already been developed to suit small farms. It is basically insufficient irrigation water and farm input and weather conditions which bring down the yield. The marginal farmer carries out farming mainly to provide food security for his own family and extra money to support his family.
With Best Wishes,
-A.Sivakumar
xxxxxxxxxxxx
19th Feb 2021
xxxxxxxxxxxxxxxxxxx
Amitabh Tiwari
·Columnist
6 January 2021·5-min read
As the new decade dawns, an important question with regards to the Indian political landscape is doing the rounds: will this be the decade of the Bharatiya Janata Party?
The BJP, led by Prime Minister Narendra Modi, stormed the political scene of the county in 2014 general elections riding on corruption charges and anti-incumbency against the Congress-led UPA-2.
The BJP won state after state during the period 2014 to 2019 on the back of its development plank. It formed governments along with its allies in 11 states, while losing power in 4 during this period.
Today, the BJP has 303 MPs in the Lok Sabha, 93 in the Rajya Sabha and 1,374 MLAs across various states in India. It has its own chief minister in 12 states, while it rules another 5 states with its allies.
There has never been a decade in Indian politics that the BJP has fully dominated. During the decade 2001-10, the BJP lost power in 2004 and the Congress, along with its allies, dominated the latter part.
During 2011-2020, the BJP dominated Indian political scene during the second half.
However, the BJP juggernaut is now on a roll. In the 2021 state elections, the party is giving a serious threat to Trinamool Congress supremo and West Bengal Chief Minister Mamata Banerjee, while it is fighting to retain Assam.
Even hardcore supporters of the Congress and other regional parties feel that they have no chance to win even in the 2024 general elections.
PM Modi’s popularity is high despite the ongoing farmer protests and the economic distress caused by the pandemic. This decade could well belong to the BJP and there are many factors working in favour of the party.
The BJP today is a very ambitious party with a clear goal of ruling at the Centre and in majority of the states. The men at the helm of the BJP -- Narendra Modi, Home Minister Amit Shah and BJP president JP Nadda -- are 24x7 politicians, who never take a break and are always in the election campaign mode.
The party takes every election very seriously, irrespective of whether it is a gram panchayat or a state level or a national level poll.
Party bigwigs campaign even for local body polls. They are not afraid of a backlash from the media in case of an electoral loss. The party always gives its best with the clear intent of wanting to emerge victorious.
The BJP claims to have a strong network of 18 crore members. Even if one discounts this claim, the actual foot soldiers of the party are volunteers of its ideological parent, the Rashtriya Swayamsevak Sangh (RSS). These selfless workers campaign relentlessly for the sake of ideology and are the BJP’s biggest asset.
The RSS has always stood for a casteless society. It, along with BJP, has successfully managed to unify the Hindu voters to a large extent, cutting across caste and class lines. Hindus account for roughly 80% of the country's population and even if the party succeeds in garnering support from half of this population, it would not lose any election at the national level.
Through a clearly crafted strategy, the BJP has managed to paint the Congress and many other regional parties with the same brush and convinced many that these parties are indulging in minority appeasement politics. This has led to a Hindu awakening of sorts.
The 'One Nation' project of the party fuses a more unitary, Hindu nationalist conception of the Indian identity which forms the ideological core of the BJP.
It has been able to bind people of the majority states into one identity, that of Indianness, which was missing earlier.
A weakened Congress is helping the BJP spread its wings even further. The current leadership of the Congress does not evoke any confidence. The party is going through an existential crisis and a section has revolted against the Gandhi family, the dynasts who continue to hold the Congress in their iron, and somewhat throttling, grip.
Rahul Gandhi’s ‘yes and no’ kind of politics does not augur well for the party.
Many regional parties are also witnessing a churn as leadership is being passed on to the younger generation. Several of these leaders, born with a silver spoon, lack the charisma of their elders and are unwilling to slog hard on the ground. The absence of leaders from the scene during the migrant crisis, in the midst of the raging pandemic, is a case in point.
The Congress as well as the regional parties in their current form are struggling to take on the might of the BJP’s relentless electoral machine.
However, the BJP is likely to face challenges as well, while it works towards dominating this decade. The party has been unsuccessful in making inroads into South India: without this, it will struggle to be called as a party with pan India appeal. However, the BJP will not be satisfied by its current victories and dominance and will not sit on its laurels. It will continue to find ways to get a toehold into southern India and spread its influence and power down South as well.
The party has a good track record while contesting state elections as the main opposition, but it does not have a similar record while defending its territory as an incumbent.
It needs to replicate the successful Gujarat model to other states where it is in power.
Somewhere during the middle of the decade, Narendra Modi could retire, if the unsaid rule of retirement age of 75 years in the BJP is applied to him as well.
What shape will the BJP take after Modi hangs up his boots? Is there a succession plan in place? Could the party face groupism or will the RSS ensure a smooth transition?
All of these exciting events to watch out for in this new decade, which, it appears, could well belong to the BJP.
0:14
5:38
BJP RSS meeting to be held in Ahmedabad; West Bengal Polls on top agenda
