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Time of India
18-07-2025
- Business
- Time of India
For most Indian farmers, costs grow faster than income
For most Indian farmers, costs grow faster than income Indian farmers are hit by the double whammy of stagnant income and declining profit margins, according to an analysis of data compiled by the Commission for Agricultural Costs and Prices (CACP). For nearly all major crops, the increase in agricultural income over the last decade has not kept pace with the rural inflation rate. The data also shows that the profit margins for most crops have declined. The analysis of ten major crops for both kharif and rabi seasons shows that, except for maize, groundnut and rapeseed/mustard, the increase in farm income has been less than the rural inflation rate during the same period. Inflation rate exceeded income growth In 2013-14, the average input cost was Rs 25,179 per hectare for paddy while the value of family labour was assessed at Rs 8,452 per hectare. The value of the crop was Rs 53,242 per hectare, which meant a profit of Rs 19,611 per hectare. In 2023-24, this profit increased to Rs 30,216 per hectare. Although this was a 54% jump, consumer prices in rural areas increased by 65% between 2013-14 and 2023-24. The crop also saw a decline in profit margins. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like This Could Be the Best Time to Trade Gold in 5 Years IC Markets Learn More Undo I n 2013-14, the profit margin was 58% of the input and labour costs, which has now dropped to 49.3% of the cost. The input cost and family labour is taken as the total expense to calculate the profit margin since this spending is also part of the formula for Minimum Support Price (MSP). Wheat, unlike paddy, is primarily a rabi (winter) crop, but a comparison of decadal growth in income and margins shows a similar pattern. The surplus over input cost and family labour was Rs 29,442 per hectare in 2012-13 and increased by 53% to Rs 45,179 in 2022-23. That's lower than the 71% increase in rural consumer prices between 2012-13 and 2022-23. The profit margin too decreased from 123% in 2012-13 to 103% in 2022-23. Sugarcane, another major crop, also saw a stagnation in net income. From Rs 96,451 per hectare in 2012-13, the profits increased to 1,21,668 in 2022-23. This 26% increase is lower than the increase in consumer price inflation. In 2012-13, the profit margin was 151%, which declined to 102% in 2022-23. Of the ten major crops (based on highest output) for which the comparison is done, only three have shown an increase in income higher than the inflation rate. These are maize (162%), rapeseed & mustard (85.7%) and groundnut (71.4%). For the rest, the increase was lower than the inflation rate. It was between 50% and 60% for gram, between 20% and 30% for soyabean and cotton, and less than 20% for arhar (tur). Apart from stagnant incomes, the profit margins have declined for all of these crops except maize. These per-hectare profits are roughly equal to the seasonal incomes for a vast majority of Indian farmers. The average land holding size in the Agriculture Census of 2015-16 was just under 1.1 hectares, but most farmers (68.5%) are marginal farmers, which means they own less than 1 hectare of land (averaging at 0.38 hectare). This means that seasonal income for them will be even lower. Experts have pointed out that the stagnation as well as lower agricultural income is due to the extent of mismatch between the share of agriculture in GDP and in employment. Despite contributing only 16% of GDP, agriculture employs more than 40% of India's workforce. In advanced economies like the US, its share in GDP and employment is 0.9% and 2%, respectively. Even in a developing economy like China, agriculture's contribution to GDP is 6.8% while it employs 22% of the workforce.

The Hindu
10-07-2025
- Business
- The Hindu
Sugarcane growers in Mysuru meet DC, demand ₹4,500 per tonne
Terming the current Fair and Remunerative Price (FRP) of ₹150 per tonne for sugarcane as 'unscientific', sugarcane growers in Mysuru have demanded that the government fix the price at ₹4,500 per tonne, as recommended by the Commission for Agricultural Costs and Prices (CACP) report. They said that the price fixation needs to be reconsidered in the interest of farmers. In connection with their demands, members of the State Federation of Farmers' Organisations and the State Sugarcane Growers' Association met Deputy Commissioner G. Lakshmikanth Reddy on Thursday, and submitted a memorandum seeking fulfillment of their long-pending issues. Mr. Reddy had convened a meeting of farmers' representatives at the ZP hall here to discuss the problems of sugarcane growers. Farmers representing various organisations attended. During the meeting, the farmers pointed out that the profits earned by sugar factories from sugarcane by-products should be shared with the growers. Although the Centre had fixed an additional ₹150 per tonne for sugarcane last year, the factories have not implemented the revised rate, they alleged. They demanded that the factories pay the pending dues along with interest. Many farmers argued that the FRP should be considered as the price of produce at the farmers' fields. To prevent losses due to 'incorrect' weighing, they urged the government to establish weighing bridges in front of all sugar factories, they said, in their memorandum. Raising concerns over water for irrigation, the farmers demanded that lakes be filled with water from the Cauvery and Kabini rivers. They also urged the Deputy Commissioner to take strict action against illegal resorts that have cropped up near the Kabini backwaters, and to prevent illegal developments in the future. Leaders including Attahalli Devaraj, Baradanapura Nagaraj, and Kiragasur Shankar were present.


The Print
24-06-2025
- Business
- The Print
The real White Revolution—Shastri's NDDB built a farmers-first economy that still works
Shastri's tenure saw the establishment of the National Dairy Development Board (NDDB), Commission for Agricultural Costs and Prices (CACP), Food Corporation of India (FCI), Border Security Force (BSF), Central Vigilance Commission (CVC), and the Central Bureau of Investigation (CBI). Shastri's home in Delhi at 1, Motilal Nehru Marg, now called the Lal Bahadur Shastri Memorial, displays his few material possessions, photographs with visiting dignitaries, besides some vignettes from his early years in Mughalsarai, Varanasi, and Allahabad (now Prayagraj). However, little attention has been given to the six institutions established by him—each with a lasting impact on India's political economy. In his brief tenure of eighteen months—from May 1964 to January 1966—Prime Minister Lal Bahadur Shastri laid the foundation for India's Green Revolution and played a crucial role in the White Revolution. He also led India to its first victory against Pakistan in the battlefield—the 1965 war. He gave India the stirring slogan of Jai Jawan, Jai Kisan . The spot where his memorial is built is appropriately called Vijay Ghat. As 2025 marks the 60th year of these institutions, it is a good time to introspect if they have lived up to the expectations with which they were founded. Naturally, over the years, the ecosystem and context have witnessed a major change. The question is: are these institutions keeping pace with the times and the expectations which their stakeholders have from them? Let's first start with the most successful and prominent among them—the Anand–based NDDB, which is today the lodestar of India's cooperative movement. Founded in 1965 under the chairmanship of Verghese Kurien, it received statutory status in 1987 under the NDDB Act. It is a good coincidence that the UN has declared 2025 as the International Year of Cooperatives. This also gives us an opportunity to critically evaluate the role played by NDDB in mobilising farmers and primary producers into cooperatives, farmer producer organisations, and 'producer companies' under Section 8 of the Companies Act, 2013. The NDDB supports not only milk but also edible oils, millets, organic produce, fruits, and green energy. The most prominent brand associated with the NDDB group is Amul, which has a turnover of Rs 90,000 crore. Its closest competition is Nandini, a brand under the Karnataka Milk Federation (KMF) cooperative, with an annual turnover of Rs 23,000 crore, followed by Mother Dairy at Rs 15,037 crore. These three top brands are way ahead of their closest corporate competitor, Nestle, whose milk and milk products division has a turnover of around Rs 7,600 crore. As such, price discovery and price realisation in the milk and associated sectors are primarily determined by cooperatives promoted by the NDDB. The genesis While visiting Anand, Gujarat, on 31 October 1964, the birthday of Sardar Vallabhbhai Patel, Lal Bahadur Shastri spent the night at the home of dairy farmer Ramanbhai Punjabbhai Patel. His discussions with the villagers convinced him of the virtues of the cooperative dairy model established by Tribhuvandas K Patel and managed efficiently by Verghese Kurien. The next morning, Shastri said to Kurien, 'I have put the most competent and experienced officers from the IAS in our milk cooperatives. In spite of this, nowhere do we see similar success. In what way are you different?' To this, Kurien replied, 'Sir, in Kheda, I am an employee of the farmers. If I fail, they can fire me. In other cases, farmers are the 'subjects' of the government official controlling their society.' Shastri smiled in agreement. 'Dr Kurien, you have to help me do what you are doing nationwide. I want you to head the National Development Board,' he said. Kurien agreed, but put forward two conditions. 'First, I will not 'join' NDDB, and will continue to remain an employee of the Kheda Milk Co-operative. Secondly, I would not like to move to Delhi, and therefore the NDDB headquarters would have to be in Anand.' Shastri accepted both these demands. Thus, Anand became the epicentre of this cooperative movement. The incredibly long tenure of NDDB's helmsman, Kurien, from 1965 to 1998 helped set in place systems and processes that have stood the test of time. The organisation now had the benefit of learning from its successes and failures in a wide range of geographies and demographics—there were milk unions in the Himalayas and the foothills, in desert regions, in irrigated as well as unirrigated tracts, in women-headed households, and in hamlets where patriarchy was deeply entrenched. Kurien handed the mantle to his erstwhile protégé, Amrita Patel (toward the end they sparred bitterly), who also had a tenure of 16 long years. In 2014, T Nanda Kumar, former food and agriculture secretary, was appointed as NDDB's chairman, but he resigned before completing five years. He was followed by Dilip Rath who had joined as the MD of NDDB after resigning from the IAS. After five years, the interim charge was held by Varsha Joshi, joint secretary in the union fisheries, animal husbandry and dairying ministry, who continues to be on the Board in an ex-officio capacity. Currently, Meenesh C Shah is the chairman and managing director of NDDB. Also read: Nothing like deviation in democracy. Even Lenin & Stalin adapted: Lal Bahadur Shastri The core principles While there have been several changes over the six decades in terms of technology, logistics, and support services, the core principles have been retained. From the very beginning, Kurien had insisted that whatever milk is brought for procurement should be accepted—no minima or maxima were prescribed—and so women-headed households with school-going children and just one cow may give less than a litre of milk, while those who had more cattle could contribute more than ten litres as well. All milk was measured and tested—each lot was tested using a centrifuge machine—and the price was determined on the basis of 'solid' and 'fat' content of the milk, thereby disincentivising any admixture with water. Farmers were provided not just with technical inputs, but were also given training on how to conduct and manage the affairs of their society—from elections and accounts to governance at the primary, district, and apex levels. It comes as no surprise then that compared to cooperatives in any other domain, the salience of the milk producer cooperative societies has reigned supreme. Over the years, NDDB took up other project-based activities in the agribusiness domain—from edible oils to Mother Dairy, fruits and vegetables (SAFAL), immunologicals, and agribusiness management. NDDB has encouraged its affiliated organisations to be flexible in its strategic outreach. Realising that as a brand, Amul must have a pan-India presence, it has also encouraged strategic tie-ups with large aggregators and processors to ensure its brand presence in all metros and Tier-I and Tier-II cities of the country. But this is not all. NDDB keeps expanding its domain to everything connected with the farmers—for while it is one thing to get into an economy of scale, it has moved beyond scale to get into scope. The NDDB's latest initiative is a joint venture named Mrida (meaning earth in Sanskrit) with the Suzuki R&D Center India. Its aim is to expand biogas plants across India. Here is a connection between two apparently unrelated sectors: dairying and automobiles. This will create more value for dairy farmers through the efficient utilisation of dung to produce clean energy and organic fertilisers. This is a circular economy in practice—every element in the chain is an input for another process—and there is no such thing as waste. The NDDB is collaborating with ISRO to track fodder resources, supporting startups in hydroponic fodder production, and ensuring that over fifty million milk producers in agriculture are part of a value chain in which they have a stake in ownership, control, and profits. The NDDB has had its share of failures. The Safal National exchange—an attempt to break the stranglehold of the APMCs—floundered while some subsidiary companies had to close down. It required government fiat to ensure that NDDB came within the ambit of CAG, CVC, and the RTI. The argument that farmers organisations should be subjected only to the control of their members is fine with respect to the cooperatives, but NDDB is also one of the largest cooperative funding institutions in the country. Later this year, in the week leading to the birth anniversary of Lal Bahadur Shastri, NDDB will be among the six institutions whose legacy will be discussed, not just in a self-congratulatory mode, but also about what needs to be done in the coming decades to evolve new strategies even when the core principles of cooperative philosophy remain firmly etched. This is the first article in a series on Lal Bahadur Shastri and the institutions he helped establish. Sanjeev Chopra is a former IAS officer and Festival Director of Valley of Words. Until recently, he was director, Lal Bahadur Shastri National Academy of Administration. He tweets @ChopraSanjeev. Views are personal. Disclosure: The columnist is a trustee of the Lal Bahadur Shastri Memorial (LBS Museum). (Edited by Aamaan Alam Khan)


The Hindu
22-05-2025
- Business
- The Hindu
Farmers seek increase in FRP for sugarcane
State Sugarcane Cultivators' Association has sought an increase in Fair and Remunerative Price (FRP) for sugarcane for the current season 2025-26. A delegation of farmers, led by Atahalli Devaraj, secertary of the association, met the authorities in Bengaluru on Wednesday and submitted their demands. Mr. Devaraj told reporters here on Thursday that FRP for sugarcane has been increased by only ₹150 a tonne, which, he said, is unscientific. A review must be conducted, and the price should be fixed at ₹4,500 a tonne as per the CACP (Commission for Agricultural Costs and Prices) report, he added. The association members also reiterated their long-pending demand of fair share of profits accrued from sugarcane by-products, by the sugar mills. In a memorandum submitted to the authorities, the association said the government has fixed an additional price of ₹150 a tonne for sugarcane by-products. But the sugar mills were yet to pay the amount due for the previous year (2024-25), and steps should be taken to ensure that the amount was released to the farmers immediately, Mr. Devaraj said. The association claimed that there was an outstanding amount of ₹950 crore payable to the sugarcane farmers. On the issue of computing the rates, the farmers said that FRP should be the price at the field and pointed out that sugar mills tend to recover transportation charges from field to factories. This, Mr. Devaraj said, should be stopped. The association pointed out that sugar factories deduct 25% of payment for sugarcane crop that was burnt due to fire and wanted the government to step in and end this practice. Seeking transparency in weighing, the farmers have sought the installation of weighing machine in front of sugar mills. Besides, there is an 8% deduction by way of wastage during harvesting and this should also be stopped, according to the association. The delegation, which met senior officials of the Directorate of Sugarcane Development and Sugar, also discussed other issues faced by farmers and urged the authorities to address their demands.


India.com
01-05-2025
- Business
- India.com
5 Crore Farmers To Gain As Centre Hikes Fair Price For Sugarcane To Rs 355
New Delhi: The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, on Wednesday approved an increase in the fair and remunerative price (FRP) of sugarcane to Rs 355 per quintal for a basic recovery rate of 10.25 per cent for the 2025-26 sugar season (October-September) keeping the interest of farmers in mind, according to a cabinet communique. The FRP for the sugar season 2025-26 is 4.41 per cent higher than the current sugar season 2024-25. It also provides for a premium of Rs 3.46 per quintal for each 0.1 per cent increase in recovery over and above 10.25 per cent, and reduction in FRP by Rs 3.46 a quintal for every 0.1 per cent decrease in recovery. However, the government, with a view to protect the interest of sugarcane farmers, has also decided that there will not be any deduction in case of sugar mills where recovery is below 9.5 per cent. Such farmers will get Rs 329.05 per quintal (qtl) for sugarcane in the ensuing sugar season 2025-26, the statement explained. The cost of production (A2+FL) of sugarcane for the sugar season 2025-26 is Rs173/qtl. This FRP of Rs 355/qtl at a recovery rate of 10.25 per cent is higher by 105.2 per cent over production cost. The FRP approved shall be applicable for purchase of sugarcane by mills from the farmers in the sugar season 2025-26 starting with effect from October 1, 2025. The sugar sector is an important agro-based sector that impacts the livelihood of about 5 crore sugarcane farmers and their dependents and around 5 lakh workers directly employed in sugar mills, apart from those employed in various ancillary activities including farm labour and transportation. The FRP has been determined on the basis of recommendations of the Commission for Agricultural Costs and Prices (CACP) and after consultation with state governments and other stake-holders. In the previous sugar season 2023-24, out of cane dues payable of Rs 1,11,782 crore, about Rs 1,11,703 crore of cane dues have been paid to farmers, as on April 28 this year, which means that 99.92 per cent cane dues have been cleared. In the current sugar season for 2024-25, out of the cane dues payable of Rs 97,270 crore, about Rs 85,094 crores have been paid to farmers, as on April 28, which amounts to 87 per cent of the cane dues being cleared.