Farmers are frustrated even though kharif crop production will set a record

- Out of 12 kharif crops, prices of seven to eight crops are currently below the MSP.

- India continues to take advantage of favorable conditions for exports amid record agricultural production

- In case of high crop conditions, it is necessary to make arrangements so that the farmers get a compensatory price of the crop

Preliminary estimates for the current kharif season show that the country's kharif crop production this year is expected to touch a new record level of more than 120 million tonnes. The kharif crop production last year stood at 124 million tonnes, the highest ever. The rise in kharif production is expected to reduce inflation, especially food inflation, although it is also dependent on crude oil prices. In the case of high production of agricultural crops, if the crops are not managed properly, it proves to be detrimental to the farmers instead of profitable. In the case of high production, the prices of agricultural commodities often tend to fall below the minimum support price. Given this fact, farmers are demanding that support prices be made legally binding. This is one of the other demands of the farmers who are currently running the agitation.

Out of 12 kharif crops, prices of seven to eight crops are currently hovering below the MSP. The four crops that are getting compensatory prices are cotton, tur, groundnut and soybean. As far as cotton is concerned, its acreage has been low in the current kharif season, which has supported its prices. Soybean and groundnut prices are likely to fall due to reduction in duty on vegetable oils by the government.

Thus, with the onset of new revenue, the possibility of prices of most kharif crops falling below the support price in the coming days cannot be ruled out. In such a situation the current frustration of the farmers may become even darker. With Assembly elections coming up in some other states, including Uttar Pradesh and Punjab, next year, the Center and state governments will be forced to take steps to appease farmers. Government purchases at support prices are mostly focused on wheat and rice. The government does not show much enthusiasm in purchasing other agricultural crops for which prices are announced. Arrangements have been made to ensure that farmers get a fair price for their produce in high crop conditions.

According to a recent report, global food prices rose for the second consecutive month in September to a ten-year high. Pulses and vegetable oil prices have risen. The Food and Agriculture Organization's (FAO) food price index, which tracks the prices of globally traded food commodities, averaged 120.0 points in September, the highest since September 2011. The FAO's Searle Price Index rose 2 percent in September compared to August. This index has increased due to the rise in wheat prices. India continues to benefit from the recent rise in global food prices.

India's wheat exports are projected to quadruple in the current calendar year compared to last year. If this happens, it will be the highest level in the last eight years. As a result of rising global wheat prices and high freight costs, Indian wheat is becoming available in Asian markets at competitive prices, but this will require ensuring quality of wheat and its timely delivery. Wheat prices have risen globally due to supply shortages from Russia and Canada, the major wheat exporters.

Global prices of most agricultural commodities are expected to remain strong this year. With prices picking up in major exporting countries like the US and Brazil due to crop losses, India needs to make a concerted effort to divert crop production to export markets.

India ranks in the top ten countries in the world in the export of agricultural commodities. According to the World Trade Organization's World Trade Statistical Review, India's share of global agricultural exports, which was 1.10 per cent in 2000, rose to 8.50 per cent in 2015 but fell to 6.10 per cent in 2016. Elsewhere, the US share of global agricultural exports, which was 15 per cent in 2000, fell to 6.50 per cent in 2016. Brazil's share has risen from 5.50 per cent to 5 per cent, while China's share has risen from 9 per cent to 6.50 per cent during the period. If India wants to outperform China and Brazil in agricultural exports, it will have to make structural changes in the agricultural sector and adopt a stable export policy.

The decade from 2010-11 to 2013-2014 has seen huge fluctuations in the country's agricultural exports. In the early years of the decade, from 2010-11 to 2016-17, the value of agricultural exports rose from ૨૪ 2.50 billion to ટા 2.10 billion, reaching an all-time high. However, in 2016-17, it fell to 2.50 billion. The next five years saw huge fluctuations in exports. Exports in 2015-16 stood at 3 billion, which is significantly lower than the all-time high. Let's hope that the opportunity to raise this figure again does not go away.