Maharashtra’s gross value addition from agriculture

In recent years, Maharashtra’s gross value addition from agriculture is relatively more from Fruits & Vegetables and Sugarcane – together these two Vegetables account for less than 8 per cent of the area under cultivation, but nearly 53 per cent of the gross value added in agriculture. These crops are largely not grown in the selected districts of Wardha, Washim and Yavatmal. The cash crops in the selected districts are Cotton and more recently Soyabean. Over the years, profitability from Cotton has declined. Some of the reasons are as follows: high subsidies by the USA leading to distortions in the international prices, low import tariff by India, failure of the MCPS in Maharashtra. At the same time, the state has been withdrawing, as is evident from, declining public investment in agriculture, poor agricultural extension, diminishing role of formal sources of credit and relatively lower public intervention programmes under MEGS in the selected districts. The farmer, now, depends on the input supplier for advice leading to supplier-induced demand and on informal sources for credit with higher interest rate thereby increasing his repayment burden. To add to these, 2004 happened to be a rain deficient year in the selected districts, but this year was one when the macro supply scenario of Cotton was good. The farmers from our selected districts were exposed to both yield as well as price shocks. To sum up, there seems to be a larger socio-economic and agrarian crisis. In the next chapter, we discuss the suicide scenario in Maharashtra.