Relationship between Agriculture Price Mechanism and Poverty in different sizes of Agriculture Land Holdings
Creators: name: Ahmed, Masood
Publisher: name: figshare
Year: 2022
Subjects: subject: 140201 Agricultural Economics
subject: FOS: Economics and business
subject: 140202 Economic Development and Growth
subject: Economics
subject: Sociology
subject: FOS: Sociology
subject: 140219 Welfare Economics

description: An increase in agricultural labour and a decline in cultivators' percentage, along with 21.9% of the Indian population or 269.78 million people living under the poverty line, requires restructuring the economic policies and massive agricultural reforms. The paper explores the Indian government's agriculture price mechanism tool, Minimum Support Price (MSP), which ensures that at least farmers get the government-announced minimum price for their agricultural produce. The research probes the role of MSP in addressing the prevailing agricultural poverty and how different farmers with different land holdings benefit from it. III. METHODOLOGY Model Explanation: The Model (Ahmed, Agriculture Model and Measurement of Survival Income in Wheat Cultivating Farmers under Different Land-Holding Categories, 2021) is based on the data provided by the Directorate of Economics &amp; Statistics of India. The cost of production data (2016-17) comprises the agricultural production cost for different crops. Table 9 provides the major Kharif and Rabi crops. The Kharif crops cover 39.6% of the cropped area (Pocket Book of Agricultural Statistics, 2017). The cost of production of all eight Kharif crops was calculated in Table 1, with the inflation impact adjusted by 5.12% to arrive at 2021 per hectare price. Above 20% and 40% of MSP, income is calculated by examining the yield- in kilograms per hectare for each crop (Table 2). The total cost of production from Table 1 is carried forward in Table 2 (a &amp; b). Total income (a7), which includes gain from the sale of produce (a5) and by-product value (a6), is calculated. Afterward, farmers' profit and loss are calculated (a8), where negative value represents loss from agricultural production (at MSP, above 20% and 40%) while positivevalue represents a profitable situation from per hectare production. The b-part in Table 2 represents savings from inputs from the farmer's side, including family labor. It also includes savings where farmers avoid spending money on what they own that they otherwise have to pay for. Survival income (c1) comprises the total income (a7) and total survival savings (b8). The cost of production (a1) is deducted from the survival income (c1), resulting in the actual disposable income (d1) per hectare. The actual disposable income keeps an agricultural farmer from carrying on work, even if a farmer accrues a loss (a8) from the crop. The Model uses the deductive cost-benefit approach to analyze the role of MSP on the crops. International poverty estimates are taken to observe the three categories of income per month (table 3) under extreme poverty (less than $1.9 per day or Rs. 4195 per month), moderate poverty (less than $3.1 per day or Rs. 6845 per month) and vulnerable (less than $ 5.5 per day or Rs. 12144 per month) and safe category above Rs 12144 per month or $ 5.5 per day. Besides considering the MSP rate and the two market-rate above MSP, the Model also considers different yields that prevail in the various regions by taking the highest and lowest yield and calculating the two levels of income based on them (Table 4). Tables 6, 7, and 8 are the income calculation based on MSP, above 20% and 40% of MSP, and formulating the agricultural farmer's position based on it under the four zones (Extreme Poverty, Moderate Poverty, Vulnerable and Safe).