Can Increase in MSP solve the crisis of Indian Farmer by Sujit Kumar

I have come to my village... and had conversations with family members engaged in farming. 

Mr. Sujit Kumar

While there's lot of fury and fire over government's historic (!) price hike for procurement of farm produce, the reality is heart wrenching. Farmers have actually resigned themselves to their sorry fate. There is simmering anger in youth, who are un/under employed in farming, for lack of better opportunities. I asked them what they feel about recent increase of MSPs would do to their well-being. They answer: not much as most of their produce get sold to private intermediaries at well below MSPs as govt remains largely absent or does token purchases from marginal and  small farmers.

Farmers in Western Bihar/eastern UP grow two staple crops a year: Paddy and Wheat. A conversation about cost in farming is revealing.

How remunerative is staple farming: A cost-benefit analysis

Land : 1 acre

1) Crop: Kharif (Paddy)

Seed: Rs 350

Rent: Rs 7000

Ploughing: Rs 1200 

Irrigation: Rs 1500

Plantation:Rs 2000

Fertilizer: Rs 2000

Weed elimination: Rs 1200

Harvesting: Rs 1200

Carriage: 200

TOTAL COST: 16650

Output: 16 quintal 

MRP: Rs 1500 per quintal

TOTAL REVENUE: 16*1500= 24000

Kharif income= 24000-16650=7350

2) Crop: Rabi (Wheat)

Seed: Rs 1700

Rent: Rs 7000

Ploughing: Rs 1200

Fertilizer: Rs 1600

Irrigation: Rs 1000

Harvesting: Rs 1200

Carriage: Rs 200

TOTAL COST: 13900

Output: 12 quintal

MRP: 1600

TOTAL REVENUE: 1600*12 : 19200

Rabi income= 19200-13900= 5300

3) Annual income of Farmer =7350+5300 = Rs. 12650

For a marginal farmer( landholding of 1 hectare= 2.5 acre)

Annual income= 12650*2.5= Rs 31625

Monthly income= Rs 3250

Daily income= Rs 87

Minimum daily wage for unskilled labor= Rs 300

If one opts to be a farmer, working on leased land, s/he earns less than a third of daily wage earner, working in construction sector. 

The economics is not much helpful for landowning farmer too, working on 1 hectare arable own land. S/he will make Rs 66000 annually or Rs 5500 per month. It's less than Rs 200 a day income for a family of five.

Informal sector offers marginally better wages for unskilled labour compared to the farm sector.

It ll take 10 hectare of land to make conventional farming competitive with lowest paying Grade IV job in government. No wonder there's a long queue for government sector employment. 

Doubling farm income by revising minimum support prices (MSP) is not sufficient to improve the plight of 95% of farmers, whose land ownership is less than 2 hectares. Alternatively, one must opt integrated farming, Viz. Staple crops be mingled with commercial ones, with parallel income avenues in dairy, poultry, honeybee, fisheries, etc. But these are capital intensive ventures, which means farmers must have good savings/access to cheap credit to begin with. Alas, both the pre-conditions remain mere a wish for great majority of farmers.