It took the tragic death of six farmers in Madhya Pradesh for the national media to report on the deep-rooted agricultural crisis. The farmers who were killed in police firing during protests were demanding that the government pay a higher minimum support price (MSP) for their crops. But it is not only in Madhya Pradesh that farmers are out in the streets. Agricultural unrest is worse in the more prosperous and productive regions, where the input cost of farming is higher and so is the debt. Farmers are bleeding. Enough is enough, they are saying.The current crisis is about the problem of aplenty. The crop production this year has been good, but the farmers are in trouble because the glut means that the value of the crop has gone down. After seasons of bad yield (caused by rain failure or variable and extreme weather), this is the straw that breaks the camel’s back. The bumper crop could have helped them make good their losses and pay their loans. Their despair should make us act.
There are many issues here. First, how will the country pay higher prices for crops? We also need to keep the food inflation low because the high cost of food would make consumers unhappy. It is also a fact that India has a vast numbers of really poor people. The government’s food procurement— buying from farmers and providing it to people through the public distribution programme—keeps the country away from famine-like situations.
So the government is caught between a rock and a hard place. On one side are farmers who need to be paid the right price for growing food and on the other side are people (including thousands of farmers) who cannot afford expensive food. As yet, the policy has been to subsidise food, not pay farmers. That’s what MSP is all about.
The second challenge is how to price agricultural produces. For farmers MSP is an insurance against price volatility. But it is set for 22 food crops only. Of these crops, governments primarily procure paddy and wheat at MSP. But the MSP mechanism needs to be reworked. In fact, the costing of food needs to be reworked, indeed understood, in its totality. We know that input costs are reducing farmers’ earnings. We also know that farmers are faced with an increasingly variable weather, which leads to crop losses. So, we don’t know what investment a farmer makes to provide us food.
Governments and market economists argue that MSPs have increased over the years. They say, it is because of this increased cost of procurement that agricultural productivity has jumped. But they miss the fact that the cost of production cannot be computed only on the basis of how much money was spent to grow a particular crop. It has to take into account the enormous risks that farmers take, like the extreme variability of weather and freak events that destroy crops every year. Then why should the costing not include the cost of infrastructure required to grow food? Indian farmers invest huge amounts of private capital into building the infrastructure for their operations, unlike any private company or industry. They pay for building irrigation facilities—more than half of the irrigated land uses groundwater. Some 19 million wells and tube wells have been built with private capital.
This discussion on the cost of food must also take into account two deadly distortions. One is the difference between the price that a farmer is paid for his/her produce and the price at which consumers like you and me buy it. It is widely known and accepted that this gap is increasing. It is also known that this price disparity is due to a combination of factors, from restrictive laws over sale of agricultural products to lack of facilities and infrastructure for storage, transportation and direct sale to cut out intermediaries. This clearly needs to be the focus, if we want affordable food.
The second distortion is the option to import certain produces in certain quantities to “cool down” rising prices. But this then hits farmers doubly. No, triply. They lose when crops fail because of the weather; they lose when the prices are low because of over-production; they lose when the prices are high because of imports. It’s a wonder that they still stick to farming and sustaining our consumption.
Don’t be fooled into thinking that other countries do not provide subsidy to farmers because of the provisions of the World Trade Organization. The name of the subsidy has changed—moved from the green box to amber or from direct to indirect—but not the reality.
And don’t be fooled into thinking that our farmers are paid huge subsidies. The bulk of the so-called agricultural subsidies go to fertiliser companies so that they produce and sell fertilisers at cheap rates to farmers. The rest of the food subsidy, if we can call it that, is the purchase of food for distribution. So, there is an extremely unequal playing field out there. It needs to be understood. It is time we talked about the real cost of our food, about how to benefit the farmers who grow our food. This is not a business we can afford to lose.
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- In the Large States category (overall), Chhattisgarh ranks 1st, followed by Odisha and Telangana, whereas, towards the bottom are Maharashtra at 16th, Assam at 17th and Gujarat at 18th. Gujarat is one State that has seen startling performance ranking 5th in the PAI 2021 Index outperforming traditionally good performing States like Andhra Pradesh and Karnataka, but ranks last in terms of Delta
- In the Small States category (overall), Nagaland tops, followed by Mizoram and Tripura. Towards the tail end of the overall Delta ranking is Uttarakhand (9th), Arunachal Pradesh (10th) and Meghalaya (11th). Nagaland despite being a poor performer in the PAI 2021 Index has come out to be the top performer in Delta, similarly, Mizoram’s performance in Delta is also reflected in it’s ranking in the PAI 2021 Index
- In terms of Equity, in the Large States category, Chhattisgarh has the best Delta rate on Equity indicators, this is also reflected in the performance of Chhattisgarh in the Equity Pillar where it ranks 4th. Following Chhattisgarh is Odisha ranking 2nd in Delta-Equity ranking, but ranks 17th in the Equity Pillar of PAI 2021. Telangana ranks 3rd in Delta-Equity ranking even though it is not a top performer in this Pillar in the overall PAI 2021 Index. Jharkhand (16th), Uttar Pradesh (17th) and Assam (18th) rank at the bottom with Uttar Pradesh’s performance in line with the PAI 2021 Index
- Odisha and Nagaland have shown the best year-on-year improvement under 12 Key Development indicators.
- In the 60:40 division States, the top three performers are Kerala, Goa and Tamil Nadu and, the bottom three performers are Uttar Pradesh, Jharkhand and Bihar.
- In the 90:10 division States, the top three performers were Himachal Pradesh, Sikkim and Mizoram; and, the bottom three performers are Manipur, Assam and Meghalaya.
- Among the 60:40 division States, Orissa, Chhattisgarh and Madhya Pradesh are the top three performers and Tamil Nadu, Telangana and Delhi appear as the bottom three performers.
- Among the 90:10 division States, the top three performers are Manipur, Arunachal Pradesh and Nagaland; and, the bottom three performers are Jammu and Kashmir, Uttarakhand and Himachal Pradesh
- Among the 60:40 division States, Goa, West Bengal and Delhi appear as the top three performers and Andhra Pradesh, Telangana and Bihar appear as the bottom three performers.
- Among the 90:10 division States, Mizoram, Himachal Pradesh and Tripura were the top three performers and Jammu & Kashmir, Nagaland and Arunachal Pradesh were the bottom three performers
- West Bengal, Bihar and Tamil Nadu were the top three States amongst the 60:40 division States; while Haryana, Punjab and Rajasthan appeared as the bottom three performers
- In the case of 90:10 division States, Mizoram, Assam and Tripura were the top three performers and Nagaland, Jammu & Kashmir and Uttarakhand featured as the bottom three
- Among the 60:40 division States, the top three performers are Kerala, Andhra Pradesh and Orissa and the bottom three performers are Madhya Pradesh, Jharkhand and Goa
- In the 90:10 division States, the top three performers are Mizoram, Sikkim and Nagaland and the bottom three performers are Manipur and Assam
In a diverse country like India, where each State is socially, culturally, economically, and politically distinct, measuring Governance becomes increasingly tricky. The Public Affairs Index (PAI 2021) is a scientifically rigorous, data-based framework that measures the quality of governance at the Sub-national level and ranks the States and Union Territories (UTs) of India on a Composite Index (CI).
States are classified into two categories – Large and Small – using population as the criteria.
In PAI 2021, PAC defined three significant pillars that embody Governance – Growth, Equity, and Sustainability. Each of the three Pillars is circumscribed by five governance praxis Themes.
The themes include – Voice and Accountability, Government Effectiveness, Rule of Law, Regulatory Quality and Control of Corruption.
At the bottom of the pyramid, 43 component indicators are mapped to 14 Sustainable Development Goals (SDGs) that are relevant to the States and UTs.
This forms the foundation of the conceptual framework of PAI 2021. The choice of the 43 indicators that go into the calculation of the CI were dictated by the objective of uncovering the complexity and multidimensional character of development governance
The Equity Principle
The Equity Pillar of the PAI 2021 Index analyses the inclusiveness impact at the Sub-national level in the country; inclusiveness in terms of the welfare of a society that depends primarily on establishing that all people feel that they have a say in the governance and are not excluded from the mainstream policy framework.
This requires all individuals and communities, but particularly the most vulnerable, to have an opportunity to improve or maintain their wellbeing. This chapter of PAI 2021 reflects the performance of States and UTs during the pandemic and questions the governance infrastructure in the country, analysing the effectiveness of schemes and the general livelihood of the people in terms of Equity.
Growth and its Discontents
Growth in its multidimensional form encompasses the essence of access to and the availability and optimal utilisation of resources. By resources, PAI 2021 refer to human resources, infrastructure and the budgetary allocations. Capacity building of an economy cannot take place if all the key players of growth do not drive development. The multiplier effects of better health care, improved educational outcomes, increased capital accumulation and lower unemployment levels contribute magnificently in the growth and development of the States.
The Pursuit Of Sustainability
The Sustainability Pillar analyses the access to and usage of resources that has an impact on environment, economy and humankind. The Pillar subsumes two themes and uses seven indicators to measure the effectiveness of government efforts with regards to Sustainability.
The Curious Case Of The Delta
The Delta Analysis presents the results on the State performance on year-on-year improvement. The rankings are measured as the Delta value over the last five to 10 years of data available for 12 Key Development Indicators (KDI). In PAI 2021, 12 indicators across the three Pillars of Equity (five indicators), Growth (five indicators) and Sustainability (two indicators). These KDIs are the outcome indicators crucial to assess Human Development. The Performance in the Delta Analysis is then compared to the Overall PAI 2021 Index.
Key Findings:-
In the Scheme of Things
The Scheme Analysis adds an additional dimension to ranking of the States on their governance. It attempts to complement the Governance Model by trying to understand the developmental activities undertaken by State Governments in the form of schemes. It also tries to understand whether better performance of States in schemes reflect in better governance.
The Centrally Sponsored schemes that were analysed are National Health Mission (NHM), Umbrella Integrated Child Development Services scheme (ICDS), Mahatma Gandh National Rural Employment Guarantee Scheme (MGNREGS), Samagra Shiksha Abhiyan (SmSA) and MidDay Meal Scheme (MDMS).
National Health Mission (NHM)
INTEGRATED CHILD DEVELOPMENT SERVICES (ICDS)
MID- DAY MEAL SCHEME (MDMS)
SAMAGRA SHIKSHA ABHIYAN (SMSA)
MAHATMA GANDHI NATIONAL RURAL EMPLOYMENT GUARANTEE SCHEME (MGNREGS)