After nearly 2 yrs, Kerala govt's base price scheme is of 'no use' for farmers

By Anand Prince

4 min read
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Representative Image / Illustration: BS Pradeep Kumar, Mathrubhumi

At a time when India witnessed historic farmers' protest against the union government's new farm laws in 2020, Kerala cabinet cleared a proactive proposal to introduce the base prices for 16 agricultural items. Titled as Kerala Farm- Fresh Pazham Pachakkari base price scheme, it came to force on November 1, Kerala Piravi day.

The regime termed the scheme first of its kind in the country and claimed that the initiative has been devised as a shield to protect farmers from adverse price fluctuations in the market. It has been almost two years and ground realities suggest the scheme is of 'no practical use' to a large section of farmers.

Poor penetration

The number of farmers registered in the scheme is the first sign that the scheme has failed to attract the people involved in the spectrum. The number of farmers registered under the scheme as on July 27, 2021 is 61,439, according to the government in reply to an unstarred question number 2,772, dated August 3, 2021 in the second session of 15th Kerala Assembly. A year later, the government in reply to a starred question number 133, dated August 31, 2022 informed the Assembly that a total of 12,475 farmers got the benefit from the scheme till fiscal 2021-2022. The government also acknowledged the fact that the number of beneficiaries is less even as the state has around 10 lakh farmers. The government in its reply maintained that it would take measures to give awareness about the scheme.

According to Kerala's Agriculture Information Management System portal, the number of farmers registered under the scheme is only 71,544, as on September 24, 2022. That suggests, only less than 8% of the total farmers in the state have registered for the scheme. Similarly, the total allocation for the scheme till the same period is around Rs 10.96 crore.

Pineapple / Photo: Mathrubhumi

Farmers unhappy about base price margin, procurement and delayed payments

“It will incur Rs 25 for producing a pineapple weighing 1 kg. While the base price decided by the government for 1 kg pineapple is mere Rs 15. It is of no practical use for us,” said Baby John, a pineapple farmer from Ernakulam's Vazhakulam. He added that procurement has been going haphazard due to shortage of warehouses. “For instance, if the farmers are to be benefited, the government should procure at least 1,000 ton pineapple at the time of price fall. But I don't think the government has the capacity to procure even 200 ton from us, “ he pointed out.

Nizam, a farmer from Kannur's Edakkad also holds a similar view on the practicality of the scheme.”Base price for the nendran variety of banana is Rs 30/kg. Potassium used as fertilizer will cost Rs 34/kg. And if labour cost and other operational expenses are calculated, the scheme has no beneficial effect on farmers,” he said.

VK Chacko, former elected member in the director board of Vegetable and Fruit Promotion Council Keralam (VFPCK), Thrissur is also sceptical about the scheme. “For the implementation of the scheme, the government has assigned parties including Horticop that have a notorious track record of letting down farmers and delaying payments to them," he said. Chacko also alleged that the base price was fixed without proper stakeholder consultation. “The officials sitting high in an ivory tower somewhere formulate schemes without assessing the ground realities. The media will pitch them as a pro-farmer initiative. Mere smokescreens,” he said.

Representative Image | File Photo: PTI

Base price is neither the profit price nor MSP: State Agricultural Prices Board

The base prices of 16 agricultural items have been fixed by the State Agricultural Prices Board. The price calculation rationale that has been followed is '20 per cent above the A2+FL cost'. Here,

A2= Costs incurred by the farmer for seeds, fertilisers, pesticides, leased-in land, hired labour, machinery and fuel, and

FL=An imputed value of family labour(cost of labour of family members involved in the agriculture).

These costs were ascertained after interviewing 300 farmers across six districts in the state. However, the report readied on the basis of these interviews remains as an internal document submitted to the government. The Board pointed out that base price was different from minimum support price(MSP) despite the misconception that both were same. MSP follows '50 per cent above A2+FL cost' formula for price calculation, it stated. Also, what the government offers is the crisis price for the agricultural item and not its profit price.

The Board maintains that they have taken feedback from farmers and has proposed the government to add five more agricultural items under the scheme. It has also proposed hiking base prices of some of the existing ones. However, these matters are not yet finalized by the state government.

Representative Image / Photo: Ramanath Pai, Mathrubhumi

Other factors that play spoilsport

  • As per the scheme, if the market price of a listed agricultural item falls below its fixed base price, then it will be procured at the base price, and later the price difference will be credited to the accounts of farmers who sell through the societies. The government has notified 300 markets under VFPCK, Horticorp among others for the procurement. While, the determination of price fall occurrence is done by a district-level committee. The committee will regularly monitor local market prices of the items. It will compare those prices with the item prices at the nodal markets it has listed. If the item prices in the nodal market too dip below base prices, then the procurement as per the scheme will be declared.That means local price fall occurrences will not be considered.
  • The government's plan was to extend the list of notified procurement markets to 500 by the end of fiscal 2020. Even after nearly two years, the number of notified markets remains at 300. The cooperative department is yet to notify the 250 Primary Agricultural Credit Societies (PACS) as procurement markets.
  • During the launch of the scheme in 2020, the government had claimed that there was provision to revise base prices on a regular basis. However, in these two years, the prices witnessed no revision. The government has neither sanctioned a special budget for nor is seen proactive in giving awareness about the scheme. This is despite its reiteration that awareness campaigns are on the way.
  • Some of the criteria like restriction on land/farmer at 15 acres, keep away those farmers taking land for lease or those who do farming in groups of three or four individuals.

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