A study on the prices of major agricultural crops of Kerala

(By: Dr. P.Yageen Thomas . Dept of Statistics. University of Kerala)

In this study, we consider the prices of nine important crops of Kerala viz. (1) Coconut (Derivatives: Copra and Coconut Oil) (2) Paddy (3) Pepper (4) Arecanut (5) Ginger (6) Cardamom (7) Rubber (8) Tea and (9) Coffee. The price indices are calculated by taking 1983 as the base year for the first seven crops and 1995 is considered as the base year for Tea and coffee as for these crops price data are available from the year 1995 only.

To compare the amount of increase in the prices of Agricultural Produces to the extent it is necessary to keep the living standards of the farmers with these of other in the society, we may consider the rate of increase in the salary of State Government employees over 1983 to 2005. From the office records I have noticed that the Assistant Grade-11 of Kerala University (or any other Universities of Kerala State) was entitled to draw a minimum basic pay of Rs. 675/- with a DA of Rs. 123/- during July 1983 and thus the total salary was Rs. 798/- (HRA and other allowances are not considered as it changes from place to place). A person freshly posted as Assistant Grade-11 during 2003 would draw a basic pay of Rs. 7990/- and DA of Rs. 400/- with a total of Rs. 8390/- per month. Hence, by considering 1983 as the base year, the salary index of Assistant Grade-11 during 2005 at the entry level is 1051%. That is the present salary at the entry level of the post has been swelled to an extent of 10.51 times that of 1983. It may be noticed that the pending DA to Government servants for the time being is 15 % of the basic pay, so that the salary index will again rise up further, if the Government releases those pending instalments of DA.

From my personal diary, I have noticed that labourers who were engaged to do agricultural works in the premises of my house during 1983 were given a wage of Rs. 20/- per day. But for the same work in 2005 July, the wage given was Rs. 200/- per day. Hence, by taking 1983 as the base year, the wage index of Agricultural labourers during 2005 is 1000 %. That is the present wages of Agricultural labourers has been swelled to an extent of 10 times that of 1893. The above indices will reflect the overall growth of wages/salaries over all sectors of Kerala.

The computed price indices of the various crops are provided in Table No. 1. From the table we notice that none of the crops observed in the table has exhibited a price growth, which is more than 4.7 times the price of 1983. Further, the price are observed to be highly fluctuating and it indicates that the farmer cannot depend with confidence in raising any of the crops so as to get an assumed and reasonable price to his produce.

For Coconut, the present index is 314 % where as the indices of its derivatives: copra and coconut oil are 277 % and 269 % respectively. Thus I conclude that, if justice has to be done to coconut farmers, the Government have to give a salary of Rs. 3.15 x 798 = Rs. 2513/- per month to an Assistant Grade-11 instead of the present total salary of Rs. 8390/- or the price of coconut has to be increased to Rs. 10.51 x 1653 = Rs. 17,383/- per 1000 nuts of medium size.

The present price index of Paddy relative to the base year 1983 is 274 %. Thus in order to do justice to the rice cultivating farmers, the Government have to increase the price of paddy to Rs. 10.51 x 254 = Rs. 2,669/- per quintal.

The Pepper price have reached a very profitable rate during 1997 to 2000, (10 to 13 times of 1983 price) but later on it crashed and now the index is only 420.6 %. A similar argument for the price equivalence on pepper during 1983 so as to fetch an equal level of growth on wages or salaries can be also worked out.

Arecanut prices also fluctuate heavily and the price index reaches 422.3 % during 2005. The present price index for ginger is 470.7 %.

Cardamom is a much affected crop in terms of its price. The price index of this crop in 2005 reached a very low level of 97.9 % when compared with that of the year 1983. If one speaks of justice to cardamom growers, the Government have to increase its price to Rs. 279 x 10.51 = Rs. 2,932/- per kg.

The present price index of Rubber is 363 %. Thus in order to do justice to the rubber farmers, the Government have to increase its price of rubber to Rs. 10.51 x 16.6 = Rs. 169/- per kg.

Since Tea and Coffee prices are available only from the year 1995, we have taken 1995 as the base year to construct the price indices of these crops. Accordingly, the price index of tea for 2003 is 128.9 %. Similarly, the price index of Coffee for 2005 is equal to 40.7 % which is the worst of all crops in terms of price decay observed.

If we consider the total salary (Basic pay + DA) of Assistant Grade-11, then it is Rs. 2,832/- in the year 1995, whereas the total salary for 2005 is Rs. 8390/-. Thus the salary index of 2005 relative to the year 1995 is 296 %. Hence, we conclude that in order to do justice to coffee farmers, the price of coffee should be Rs. 115 x 2.96 = Rs. 340/- per kg, where as its existing price is only Rs. 47/- per kg.

Our hard working and strained farmers are living in a community consisting of Agricultural Labourers, Govt. Servants, workers of private and public enterprises, families of NRI’s and others. The consumeristic trend of people put them into trouble because of their incapability of purchasing power due to dis-proportionality low existing prices for their agricultural produces. Input costs of agriculture and labour costs are spiraling and this makes them to fail from proper scientific farming and this causes much reduction in the productivity of the crops. Temptations of modern essential amenities such as cell phones, TV’s, Fridges, vehicles, rich food etc. make them desperate. Thus they loss their morale and life become miserable to them and they end up their lives.

A serious by product of these problems makes many of the cultivators either to stop agriculture or switch over to other professions. We have conducted the trend analysis of rice crop and noticed that the area under this crop is diminishing steadily year after year. It is estimated that annually there is a reduction of 22615 hectares of land in rice cultivation. Consequently, the production of rice is also drastically reducing year after year causing much worry to the internal production of rice in Kerala.

In the light of the price study conducted here, immediate steps are to be taken to ensure fair prices to all agricultural commodities of the State if not equal to 10.51 times the price of 1983 at-least to a reasonable multiple of the price of the produce in 1983.

This post copied and published in  agrarian crisis tag/Kerala

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2 പ്രതികരണങ്ങള്‍

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