here, at the Indian Farmers' website, you'll find this article (word document): 'Status Paper on Rice'. on page 13 and 14, you'll find a detailed breakdown of all the costs involved in producing rice. and the concluding part says:
YIELD, COST OF CULTIVATION PER QUINTAL AND INCOME
(a) Cost of cultivation per acre Rs. 25000/-(b) Average yield of paddy per acre is 25 quintals (35 bags)(c) Cost of cultivation per Quintal (Rs. 25000¬ /25) = Rs. 1000/-(d) MSP fixed for paddy per quintal is Rs. 745 (for the year 2007-08)(e) Total gross income (Rs.745 X 25 quintals) =Rs.18,625/-(f) Estimated loss per acre to the farmer (Rs.25,000 – Rs.18,625/-) = Rs 6,375/-(g) MSP to be fixed as per Prof. M.S. Swaminathan Commissionrecommendation should be Rs.1,500 per quintal (Cost of cultivation + add minimum 50% of cost of cultivation i.e. Rs.1000+500=Rs.1,500)
3) what if the m.s.p were increased to rs. 1,500? the average paddy farmer with a landholding of 2.96 acres would make around (rs. 1,500 per quintal x 25 quintals per acre x 3 acres) rs. 1,12,500 which would yield him a net income of (rs. 1,12, 500 minus costs of rs.75,000) of rs. 37, 500. the per capita income of his family members (assuming a family size of 5) would be around rs. 7,500, or less than one-third the per capita income of rs. 23,729 (in 2004-05, at current prices) of the state.
is there really a point in further speculating on what would the farmers earn if the minimum support prices were doubled to rs.2,000?
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as i mentioned earlier, i wrote that draft over an year ago. now, minimum support prices have gone up slightly: rs.1,030 for grade 'a' variety and rs.1,000 for other varieties. which means the conclusions i'd drawn on all the 6 scenarios presented still hold true. and only scenarios (1) and (2) reflect the current reality as you know. (3), (4), (5) and (6) represent hypothetical scenarios. pipe-dreams which rest on miracles.
there are a couple of things one needs to know to understand how these farmers survive if the returns are so low or non-existent: the total estimate of costs listed in the status paper also includes a 'land lease' component: rs.7,000 for an acre. this is what the owner-cultivator would save, but the tenant farmer would be deprived even of that. also, a certain percentage of the farmers also go in for a second crop. but that wouldn't make a great difference in their incomes, i think, because most of the costs would have to be incurred again.
the high priests of 'food security' aren't thinking about all that i guess. as i said in my previous post, there seems to be a strong belief among them that these are manageable problems. that a few wise interventions like increasing support prices, subsidies and agricultural extension etc would improve productivity, which is a primary concern for them, and also somehow give the farmer greater returns.. from sainath to jayathi ghosh, everyone's been reeling out those mantras. but the stupid shudras have a saying: mantraalaku chintakaayalu raalavu. which means, roughly: the tamarind tree wouldn't shed its fruits for mantras.
from swaminathan to sainath, they've been spouting these mantras for many years now. i don't doubt their sympathy for the farmers. but i'm convinced, seven years after the congress was re-elected promising succour for the farmers (one of its main election planks) and seven more years of unabated chanting of mantras, that they probably think of the farmer as some kind of a lifeless cog in a vast system of machinery that's not working as per their grand designs. the cog's problems matter only so far as they affect the working of the machinery.
lastly, according to some latest observations in the media, the costs of cultivating each acre have gone upto rs.30,000. even if all those estimates are wrong by even a significant percentage, say 20 or 30 or even 50, i don't see how it will change that overall inexorable reality.
