Worst price slump in 18 years shows scale of farm crisis

Farm crisis,Indian farmers,BJP

This financial year, 2018-19 could end up being the worst year for farm incomes in almost two decades, government data indicates in a revelation that emphasises the gravity of the ongoing agrarian crisis and highlights a possible fault line for the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government ahead of the Lok Sabha elections.

According to Wholesale Price Index (WPI) data for the month of December released on Monday by the ministry of commerce and industry, the WPI sub-component for primary food articles has been negative for six consecutive months beginning July 2018. This means their prices are falling.

WPI for primary food articles is a good indicator of farm-gate prices as farmers sell their products in wholesale rather than retail markets. Even the food sub-component of the Consumer Price Index (CPI) basket has registered negative growth between October and December 2018. The disinflation in wholesale prices is not visible in the non-farm economy though. The overall WPI has shown positive growth in all these months.

Analysts say the asymmetry in inflation – falling farm-gate prices and rising non-farm prices – means that farmers have suffered deterioration in their terms of trade. They are selling their products cheaper, but having to buy other things at higher prices.

The WPI sub-component for food components was -0.1% in December. It was -2.1%, -4%, -0.2%, -1.4% and -3.3% in the preceding five months. The last time WPI for primary food articles showed negative annual growth for two consecutive quarters was in 1990. The disinflation in farm prices has also led to a collapse in nominal farm incomes, which was last seen in 2000-01.

Doubling farm incomes was one of biggest promises of the Narendra Modi government after it assumed office in 2014. It was repeated during a resolution on agriculture adopted by the BJP at its recent national council meeting in New Delhi. The resolution says: “Budget allocation for the agriculture sector has also increased in recent years and this government is fast reaching towards the goal of ‘doubling the farm income’. This National Council expresses its confidence that the aim of ‘doubling the farm-income’ would be achieved in given time period under the BJP government.”

The agrarian crisis is one of the factors that may have resulted in the BJP’s loss in three Hindi heartland states of Chhattisgarh, Rajasthan and Madhya Pradesh in December, according to analysts, and the party clearly doesn’t want it to affect its prospects in the 2019 parliamentary elections. HT reported on December 29, 2018 that the government is considering a farm package that could include farm loan waiver, direct income support to farmers, crop insurance at a flat premium of Rs 1, and Rs 2,000 per acre transfer to farmers to make up for post-harvest losses.

“The crisis of price growth in agriculture is a political economy problem. The present government has been trying to appease rating agencies and middle class at the cost of domestic economy and farmers by low inflation through keeping food prices depressed,” said Himanshu, an associate professor of economics at the Jawaharlal Nehru University. “A hike in kharif MSPs did not help, because there is also a problem of demand deflation in the rural economy. Collapse in rural wage growth has eroded purchasing power and demand, which cannot be addressed by farm loan waivers and MSP hikes,” he added.

Along with their adverse distributional impact on farmers, disinflation in food prices will also have a macro impact on the Indian economy. Fall in nominal rural incomes due to falling prices and low rural wage growth, are bound to put a squeeze on consumption demand in the economy. At a time when consumption growth is already decelerating, this will have an adverse impact on overall growth figures as well, said Niranjan Rajadyaksha, research director and senior fellow at IDFC Institute, Mumbai.

“The disinflation in food prices shows that terms of trade have worsened for agriculture. This also underlines the fact that the crisis in the rural economy is of incomes and not wealth. The government thinks that it can address the rural crisis by aiding wealth creation by promoting construction of houses and toilets. This is not going to work and it is also too late for the government to address the crisis in farm incomes,” said Praveen Chakravarty, chairman of the Congress data analytics department.

The BJP offered a different view. “Falling inflation is always a welcome sign, as it is pro-poor. But rising inflation does not always mean that the farmers are getting a good price for produce, because of inefficiency and gaps in supply chain. Falling inflation will also help the Reserve Bank of India cut down interest rates and catalyse faster growth,” said BJP spokesperson Gopal Agarwal.

To be sure, the current crisis in farming is related more to a crash in farm prices rather than output growth.

In July, 2018, the government increased the minimum support prices (MSPs) of 14 crops to give farmers a 50% return over their cost of production.

According to quarterly WPI data from June 1983 onwards from the Centre for Monitoring Indian Economy’s (CMIE) database, the last time WPI for primary food articles showed negative annual growth for two consecutive quarters was in December 1989 and March 1990. This analysis has used both the 2004-05 and 2011-12 series of WPI.

[“source-“hindustantimes”]

Delhiites could live 3 years longer if the Clean Air Plan works out

National Clean Air Programme,Delhi pollution,Delhi air

Delhi’s residents could hope to live 3.35 years longer if the National Clean Air Programme (NCAP) is implemented and the reduction in air pollution is sustained, according to Michael Greenstone, the Milton Friedman professor in economics at University of Chicago and the director of the Energy Policy Institute (EPIC).

Greenstone is one of the creators of the Air Quality Life Index of AQLI which measures the impact of particulate matter pollution on life expectancy. According to Michael Greenstone, Delhi is among the most polluted cities in the world.

NCAP, which was launched by India’s environment minister Harsh Vardhan last week, aims to reduce the concentration of PM 2.5 (fine, respirable pollution particles with a diameter of less than 2.5 micron) and PM 10 (coarse pollution particles) in 102 non-attainment cities (cities which didn’t meet the annual PM 10 national standard from 2011 to 2015) by 20% to 30% by 2024 over their 2017 annual average levels. NCAP was criticised by environmental experts for not having legally binding air pollution reduction targets. It aims to take a “participatory and collaborative” approach.

Greenstone said the targets could also be achieved by providing incentives or disincentives . “I think it’s terrifically important that the government get deeply engaged in air pollution reduction. NCAP reflects that the public is beginning to demand improvements in air quality. It’s an important step,” Greenstone said, adding that NCAP has very ambitious goals “As is so often the case here too, the devil is in the detail. I assume there will be a lot of hard work in successfully meeting those goals. Money helps focus people’s minds. Empower people to meet targets, give them incentives to deliver it.”

In the US, under the Clean Air Act, if states failed to get their counties to comply with standards, then the money to build highways was withheld. “What’s at stake here is an opportunity for people to live longer,” Greenstone added.

Greenstone who has worked with and tracked the air pollution reduction strategies in China for decades said India’s neighbour has achieved improvements through a “methodical focus.”

“In China, the work on air pollution was set out by the demands from the public. India is the biggest thriving democracy in the world; China has more of a single party rule. It’s been quite surprising to me how responsive the Chinese government has been to air pollution, even though China doesn’t have a history of democracy,” he said. According to Greenstone, China managed an unprecedented reduction in air pollution in a very short time.

“After the US passed the clean air act in 1970, it probably took 12 to 15 years for reduction in pollution in US to be as large as what China has achieved in only four years. The US had two or three vicious recessions in the midst of that but China has been growing. So it’s against backdrop of growth that it is especially interesting,” he said.

In China, officials who didn’t achieve the target in their city or district didn’t get promoted or were punished for not delivering on air pollution targets. Using satellite data, the Air Quality Life Index (AQLI), a tool developed by EPIC for both India and China found that PM 2.5 levels air across China were down by 12% in 2016 compared to 2013 levels.

Greenstone recommends targeting the biggest polluters first through NCAP. “Go to the biggest polluters and fix them.” EPIC has been working with the Gujarat government for several years now on developing an emissions trading system for industries there. Taxes, cap and trade mechanisms could be used under NCAP too he said.

[“source-“hindustantimes”]

More Than 500 Charged For Drink Driving On New Year’s Eve In Delhi

More Than 500 Charged For Drink Driving On New Year's Eve In Delhi

Around 15,000 police personnel were deployed on New Year’s Eve. (File)

New Delhi: More than 500 people were fined by the Delhi Police on New Year’s Eve for drink driving, officials said today.

Around 15,000 police personnel were deployed across the national capital on New Year’s Eve and special traffic arrangements were made, the police said.

A total of 509 challans were issued for drink-and-drive cases, they said

[“source-ndtv”]

India To Have Highest Number Of Births On New Year’s Day

India To Have Highest Number Of Births On New Year's Day

Globally, around 18 per cent of total baby births are estimated to take place in India only.

New Delhi: 

Prediction of the United Nations about India to be the world’s most populous country in the 21st century may soon turn into a reality as the nation is likely to produce as many as 69,944 babies on New Year’s Day. Globally, around 18 per cent of total baby births are estimated to take place in India only.

As per the latest data compiled by the United Nations, over 69,944 children will be born in India on New Year’s Day followed by China and Nigeria with 44,940 babies and 25,685 babies respectively.

“This New Year Day, let’s all make a resolution to fulfil every right of every girl and boy, starting with the right to survive,” said Yasmin Ali Haque, UNICEF India Representative.

She also stressed upon the need to invest in training and equipping local health workers so that every newborn is born into a safe pair of hands.

Moreover, India’s neighbour Pakistan (15,112 babies) has been placed fourth in the list followed by Indonesia (13,256 babies), The United States of America (1,086  babies), The Democratic Republic of Congo (10,053 babies) and Bangladesh (8,428  babies).

Home to approx 1.3 billion people, India at present is the second most populous country in the world, after China. According to UN estimates, India’s population will slip past China by 2024.

As per the researchers at Yale University, a relatively young age structure also contributes to India’s population growth.

“The median age in India is 27 years, compared to 38 years for China. Children under age 18 account for one-third of India’s population as compared with one-fifth of China’s,” the University stated in its report titled “India’s Population: Becoming Number One”.

The report further highlighted that New Delhi has achieved notable progress in reducing mortality rates.

“Life expectancy at birth increased from 44 years in the mid-1960s to 68 years today. India’s child mortality rate at 38 per 1,000 births still lags behind China’s rate of 11,” the Yale University report read.

 

Early marriage and pregnancy still contribute to excessive maternal deaths, and life expectancy of Indian women is eight years less than their counterparts in China,” the report added.

[“source-ndtv”]