Karnataka’s farm sector is still reeling under the impact of demonetisation and GST, according to a price forecast study by the Karnataka Agriculture Prices Commission (KAPC). Prices of various agricultural produce may dip further in the coming days, it predicts.
The ‘Perspective Report- December 2017’, submitted by the KAPC to the State government, says the prices of most of the crops are likely to continue to rule below the level of the Minimum Support Price (MSP) prescribed by the Centre. The KAPC has recommended that the government conduct a detailed analysis of the impact of demonetisation and GST, besides commencing procurement of various crops to bail out farmers.
KAPC Chairman T.N. Prakash Kammaradi told The Hindu there was an unusual trend seen in the markets. There was increase in arrivals of various produce to the market during non-season, that too when there was dip in cultivation area and actual production of these crops.
The study by the commission shows that as against the trend of arrivals only after November, there was substantial quantum of arrivals of several crops including areca, copra, and raisin to the market much earlier in 2017. In fact, compared with 2016 — pre-demonetisation — 2017 saw 24% increase in arrival of cereals, 25% in pulses, 26% in fruit crops and 7% in spices. The average increase in arrivals to the major markets in 2017 when compared with 2016 was about 21%, the report says.
This was “no good news to farmers” as the prices of crops crashed, the report says, pointing out that prices of pulses dipped by 30%, while the average drop in prices of all agricultural prices stood at 13%.
But what went against logic is that while there was increase in arrivals of these crops to major markets, their cultivation area and production levels had shown a declining trend both at the State and national level, the report says.
The report blames the trend of more arrivals at times of dip in production on demonetisation and introduction of GST affecting transaction of agricultural produce. “There appears to be a stock of agricultural produce which has not been sold after demonetisation and GST,” report states.
Observing that those in the trade of agricultural commodities, including traders and agents, were yet to adopt the reforms introduced through GST, the report says the confusion from this may have further affected prices of agricultural commodities.