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Charts & Analysis

Chart: Paying Farmers More To Sow Less

In the Mid-Year Analysis, the FinMin has revealed that we have distanced ourselves from reality more than ever. Despite a great monsoon, we might end up seeing prices of food rise, because the area sown, of the Kharif crop, in 2011-12 is mostly lesser than the previous year.

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But the amount of money the government pays – the minimum support price – of the same crops is up substantially, from 7% to as much as 18%.

Essentially, we the taxpayers are paying more for food to farmers who have sown lesser – the price increase is not working as an incentive to produce more. The NREGA may be playing a part (farm labour availability has reduced).

And if you’re wondering, the government has purchased 200% to 300% of the amount of stock needed (of wheat and rice). Much of this rots in our warehouses, and the food subsidy bill is needlessly high. Your taxes hard at work.

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