Mitras Analysis of News : 13-6-2017

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1.Why a price increase alone won’t help farmers (The Hindu)

2.What is a pre-industrial climate and why does it matter? (Down to Earth)

 

1.Why a price increase alone won’t help farmers (The Hindu)

 Synoptic line: It throws light on the issue of ongoing farmer crisis and whether rise in the minimum support price (MSP) can solve problem or not? (GS paper III)

Overview

  • ‘Farmers’ protests’ have once again become a national issue. The protests, which started in Madhya Pradesh and Maharashtra, have spread to other states like Rajasthan and Tamil Nadu. Farmer suicides are also still rampant in the country.
  • The demands of farmers have been more or less the same over the years, from procuring loan waiver to respectable minimum support price for their yield. With the advent of the Green Revolution, modern methods of cultivation, primarily use of machinery, high-yielding varieties of seeds, fertilisers and pesticides were emphasised. This strategy led to increase in agricultural productivity but had probably “unintended” consequences.

Agriculture distress

  • Agricultural distress is often viewed as a short-term phenomenon, in which farmers look for support from various quarters to get a gainful return due to price crash, poor marketing facilities, rising credit burden, increasing cost of inputs and frequent occurrence of natural calamities.
  • Agricultural distress has become a permanent feature due to the failure of not only elected governments to find a lasting solution but also local institutions such as community or social networks which are supposedly weakening because of increasing individualisation. The consequence is that helpless farmers are increasingly pushed to the brink of committing suicides.
  • It is hard for India to imitate developed nation economic models largely due to economic, historical and of course, political reasons. Undoubtedly, agriculture in western countries too both in terms of national income and employment has declined due to rapid industrialisation. The people who lost employment found alternative employment opportunities in industries or urban areas. But, such is not the case in India. India does not enjoy symmetrical development, neither in agriculture nor industry.
  • According to the 70th Situation of Agricultural Households in India conducted by National Sample Survey Office (NSSO), 90 per cent of India’s farmers have less than two hectares of land. The survey says the average farm household makes less than Rs 6,500 a month from all sources of income.

Rising MSP- is this viable solution?

  • With ongoing farmer‘s protests the non-availability of remunerative prices to farmers on agricultural produce emerges as the prime issue in various research studies.
  • Some critics argue that a rise in the MSP will lead to increase in food inflation, while others that it will augment farmers’ income. Both arguments rest on the mistaken notion that the MSP is a remunerative price however it is actually an insurance price, a floor price of sorts.
  • The Government of India has an MSP for 23 crops, but official procurement at the MSP is effectively limited to rice and wheat, and that too concentrated in a few States only. Awareness about the MSP is limited to States such as Punjab, Haryana and Andhra Pradesh where such procurement takes place.
  • According to the National Sample Survey’s (NSS) 2013, even for paddy and wheat, less than one-third of farmers were aware of the MSP; for other crops, such awareness was negligible. Further, a substantial proportion of crops are sold to local private traders and input dealers to whom the resource-poor marginal and small landholders are obligated to sell their crops due to tie-up with credit.
  • According to NSS data, over 40% of farmers still rely on non-institutional lenders, who mostly happen to be moneylenders-cum-traders and input dealers. Further, analysis of credit disbursement data from the Reserve Bank of India reveals that out of total advances to agriculture, the share of indirect finance has increased substantially over time, while that of direct finance to farmers has declined.
  • Unless the fundamental problems of crop and regional bias of MSP policy, government procurement and access to institutional credit are addressed, mere increase in MSP will not benefit most farmers in the country.
  • Various studies show an increasing divergence between agricultural and non-agricultural income. And the rising aspirations among rural youth to emulate urban lifestyles put enormous pressure on them to find ways to increase income through various agricultural activities. Unfortunately, income from crop cultivation, which is a major segment of agriculture, is not growing enough to meet the expected level.
  • Indebtedness is the most acute problem faced by small and marginal farmers. Loan waiver is also not effective measure as their borrowings are primarily from moneylenders and hence a loan waiver is not going to make any sense for them. It is the richer farmers who are the real beneficiaries of such populist policies.

Income declined

  • According to the Ministry of Agriculture and Farmers Welfare, income from cultivation of many cereals and pulses has declined between 2004-05 and 2013-14 despite a considerable increase in MSP during this period. In the case of paddy, out of 18 major rice-growing States, net income has declined in five, and it is negative in six States. Only in some states it has been marginally rise.
  • Income from the cultivation of even horticultural crops is uncertain due to the heavy investment involved and the high volatility in market prices. There has been acute rise in prices of fertilizers between, while the price of urea increased by 69%, that of DAP (diammonium phosphate) and potash rose by 300% and 600%, respectively.

Way ahead

  • There is a need for an integrated approach, one that addresses source sustainability, land use management, agricultural strategies, demand management and the distribution and pricing of water and need of moving towards modernization of agriculture which would reduce dependence of labour force and enable a rise in productivity.
  • The possible solution can be reach through the implementation of the Swaminathan Commission report, which had recommended fixing the minimum support prices (MSP) for crops at levels at least 50 per cent more than the weighted average cost of production. But the long term solution is to expediting steps to reform the Agricultural Produce Market Committee system, gradually align crop production with genuine price signals, while moving ahead with reforms to de-risk agriculture, especially by increasing the crop insurance cover.

Question: What can be the possible implications of increasing MSP to overcome the price stress associated with farm sector? 

 

2.What is a pre-industrial climate and why does it matter? (Down to Earth)

 Synoptic line: It throws light on the concept of pre- industrial climate and its implication for the climate change. (GS paper III)

Overview

  • Over the past few days there has been a lot of talk about the Paris climate agreement, from which the United States is planning to withdraw. Although this is a setback, there is still near-complete consensus from the world’s governments that a strong effort to tackle climate change is needed.

Introduction

  • The Paris Agreement aims to limit global warming relative to a pre-industrial baseline. Its precise commitment is to hold the increase in the global average temperature to well below 2℃ above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5℃ above pre-industrial levels, recognising that this would significantly reduce the risks and impacts of climate change.

what are “pre-industrial levels”?

  • If we’re aiming to limit global warming to 1.5℃ or 2℃ above a certain point, we need a common understanding of what we’re working from. But the Paris Agreement doesn’t provide a definition.
  • This becomes key as governments expect climate scientists to coherently compare different plans to reach their Paris targets. It’s crucial to be clear on what researchers mean when we say “pre-industrial”, and what assumptions our projections are based on.
  • The Industrial Revolution began in the late 1700s in Britain, and spread around the world. But this only marked the beginning of a gradual rise in our greenhouse gas emissions. Various studies have found climate change signals appearing on a global scale as early as the 1830s, or as recently as the 1930s.
  • Besides the evolving and increasing human influence on the climate, we also know that plenty of other natural factors can affect Earth’s temperature. This natural variability in the climate makes it harder to determine a single precise pre-industrial baseline.
  • Scientists separate these natural influences on the climate into two groups: internaland external
  • Internal forcings transfer heat between different parts of Earth’s climate system. The El Niño-Southern Oscillation, for example, moves heat between the atmosphere and the ocean, causing year-to-year variations in global average surface temperatures of about 0.2℃.
  • Similar variations also happen on decadal timescales, which are associated with slower energy transfers and longer variations in Earth’s temperature.
  • External forcings come from outside Earth’s climate system to influence global temperature. One example of an external forcing is volcanic eruptions, which send particles into the upper atmosphere. This prevents energy from the Sun reaching Earth’s surface, and leads to a temporary cooling.
  • Another external influence on Earth’s climate is the variability in the amount of energy the Sun emits.
  • The Sun’s total energy output varies on multiple cycles and is related to the number of sunspots, with slightly higher temperatures when there are more sunspots, and vice versa.
  • Earth has experienced extended periods of cooling due to more frequent explosive volcanic eruptions and periods of few sunspots – such as during the “Little Ice Age” which lasted roughly from 1300 to the 1800s.

Conclusion

  • At the moment there is a drive among the climate science community to better understand the impacts of 1.5℃ of global warming. The Intergovernmental Panel on Climate Change will deliver a special report on 1.5℃next year.
  • But scientists are defining “pre-industrial” or “natural” climate in different ways. Some work from the beginning of global temperature records in the late 19th century, while others use climate model simulations that exclude human influences over a more recent period. One recent study suggested that the best baseline might be 1720-1800.
  • These different definitions make it harder to synthesise the results from individual studies, which is vital to informing decision-making.
  • This will have to be a consideration in the writing of the IPCC’s report, as policymakers will need to easily compare impacts at different levels of global warming.
  • There is no definitive way to determine the best “pre-industrial” reference point. An alternative might be to avoid the pre-industrial baseline altogether, and instead set targets from more recent periods, when we have a better grasp of what the global climate looked like.

Question:  What are the alternatives required to limit the climate change upto pre-industrial level. Is it feasible to be achieved under the present circumstances?

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