Open-ended universal PM-KISAN, limited KALIA offer prompts BJD press ‘Central share’ button!

The shocker is Odisha didn't provide paddy cost of production to CACP. But BJD last year had provided so to the President Ram Nath Kovind. No change in farm loan NPA or overdue position post launch of KALIA

Bhubaneswar: It seems two trigger-factors have made the ruling BJD press the ‘Central share’ button for its much touted KALIA scheme yesterday in Parliament.

First, the ruling BJD has promised KALIA for only five agricultural seasons starting from 2018-19, which means the scheme’s expiry date is fixed at Rabi season 2021. The State government’s Eco-Survey 2018-19 has clearly mentioned so.

And second, the move by the Centre to universalise the PM-KISAN (Pradhan Mantri Kishan Sammridhi Yojana), which is an open-ended scheme.

A cost-benefit analysis of KALIA and PM-KISAN also provides some startling facts.

While State Government has allocated Rs 5,611 crore or over 1 per cent of GSDP for KALIA in 2019-20, the Centre’s allocation of a whopping Rs 75,000 crore for PM-KISAN worked out at mere 0.35 per cent of GDP in 2019-20.

When KALIA has nagging identification problem, universalisation of PM-KISAN has eliminated any such bottlenecks. It has been observed that while BJD is pumping more into a scheme having bottlenecks galore, BJP’s PM-KISAN is not costing the centre any big fortune. But the outcome has no such logjams.

Sources in the SLBC (State Level Bankers Committee) revealed that even post KALIA, the NPA and overdue proportion under heads like short-term crop loan and Agricultural term loan has remained at around 9 per cent. And the overdue proportions of the farm loans remained at around 35-48 per cent.

Politically also it has been established empirically that universalised schemes give better outcome than schemes like KALIA, where the exclusion/inclusion criteria is quite complex. Political risks are high in complex schemes. For which, BJP had promised to universalise the scheme in its poll manifesto.

Taking into account all the future liabilities, the BJD has raised the voice for amalgamation of such direct income support schemes for farmers sponsored separately by Centre and States.

Moreover, while urging for an amalgamated direct income support scheme, BJD Parliamentary Leader in Rajya Sabha, Prasanna Acharya, took pot shots at Centre’s MSP policy. He criticised hike of mere Rs 65/q in MSP for Paddy this year.

But the big irony is the 2019-20 report of Commission for Agricultural Cost and Prices (CACP), which recommends MSP to Centre, has quite categorically noted that Odisha didn’t provide the cost of production of paddy to CACP, despite a request by CACP.

“Only states like Andhra Pradesh, Maharashtra and Punjab had provided  respective paddy cost of cultivation to CACP,” the report observed.

Interestingly, prior to elections, BJD had sought an appointment with President Ram Nath Kovind on increasing paddy MSP. The party then had pegged it at Rs 2,500/q. But why it didn’t supply the same to CACP raised eyebrows.

As per CACP, the cost of production of paddy per quintal in Odisha in 2019-20 has been estimated at Rs 1,444 (A2+FL) and Rs 1,773 (C2), respectively. A2 means all paid out expenses like seeds, fertiliser to irrigation and labour. A2 + FL means A2 plus the imputed cost of family labour. C2 means the comprehensive cost that included rental cost of land.

The MSP of Rs 1,815/quintal, therefore, will give an Odisha farmer a margin of Rs 371/q vis-a-vis the A2+FL benchmark. But a margin of mere Rs 72 over the C2 price.

The norm all over the years in CACP is MSP has been estimated taking into account the A2 + FL benchmark.

Sources in OUAT disclosed the cost of cultivation in Odisha at around Rs 2,300-2,500/q.

Now consider this. If assuming a farmer selling around 20 quintals of paddy from a hectare of land, then the farmer would earn around Rs 12,000 more over the current MSP rate per year or around Rs 1,000/month.

In contrast, the two direct income support schemes (KALIA + PM – KISAN) enrich a farmer’s hand with a whopping of Rs 16,000 or Rs 1,333/month.

Experts, therefore, observe that State farmers need both schemes, not an amalgamated and a truncated scheme.