Thread by @TowardsLiberti

Past few years @RahulGandhi has been saying that "Modi took away money from farmers and gave to Industrialists"

I did some research to find out the truth of his claims and the results are quite shocking!

Look at the wholesale prices of 8 Vegetables for the last 10 years (1/n)

6 out of 8 vegetable prices have crashed since 2014. Except for chillies, all vegetable are selling at lower than 2014 prices.

Onion, Potato, Garlic and Cabbage are at 10-year lowest prices.

Onion: ₹14.5 in 2014, now ₹6.7
Potato: ₹17.6 in 2014, now ₹6.5

(2/n)

The data is from the National Horticulture Board (NHB) website. nhb.gov.in/OnlineClient/M…

Now take a look at the retail prices, you'll find a similar (not same) pattern here.

It is not the same, largely because of the growing retail margins. (3/n)

I have calculated the retail margin (% of the wholesale price).

You'll find that the margins are increasing especially for Potato, Onion and Tomato(POT) the highest selling vegetables. (4/n)

Take a look at fruits wholesale prices below

While wholesale prices crashed, retail prices stagnated and retail margins are increasing like never before.

Consumers don't feel the price drop. It's the middlemen who are benefitting the most, while farmers suffer. (5/n)

For completeness, I have added Flower prices and margins below.

Note: The NHB data for flowers from 2009-12 doesn't seem to be reliable, as the qty and price look odd.

You'll still find dropping prices there from 2014 onwards. (6/n)

Let's get back to the original question. How much money did the farmers lose?

The total loss in 4.5 years:

₹1.51 Lakh Cr, if 2014 prices were same
₹2.38 Lakh Cr, if there was 4% healthy inflation
₹5.32 Lakh Cr, of notional loss, had farmer's income doubled in 5 yrs

(7/n)

How did I arrive at this figure? Let's do the math.

nhb.gov.in/OnlineClient/M…

NHB website provides data for 30 cities across the country. I downloaded data for Delhi, Mumbai & Bengaluru, out which I selected a city for each crop.

Eg: Delhi for Potato, Mumbai for Onion (8/n)

Actuals: Adding up Wholesale Price X Qty for each month
Zero Inflation: Dragging the price of 2014 to all cells
4% Inflation: Applied the formula of 4% from 2014 onwards

Added each crop's total value from 2015-19 and got the below results for each market selected (9/n)

The next table shows the total loss incurred because of the price crash in last 4.5 years.

Please note: This is just for the markets picked. How will I apply this for the whole country?

(10/n)

For that, we need to find the share of trade in each market with respect to the countries production.

Again, NHB data comes to our rescue. nhb.gov.in/statistics/Pub…

Now, I can infer, e.g., 2.5% of Ginger produced was traded in Bengaluru in 2015-16.

(11/n)

When we say "farmers lost ₹2.38 Lakh Cr" what does this loss mean for you and me?

Potato - ₹24/kg in 2014, now ₹15/kg
Avg price - ₹18/kg for 4.5 yrs
Std 4% inflation - ₹30/kg

If your family consume 1 kg weekly, you've saved ₹2,808 just for potatoes.

(12/n)

Now, add the savings from vegetables, fruits, cereals, sugar etc. E.g, Sugar price came down by ₹6 and wheat by ₹5 in 5 years.

We buy gadgets, fuel, clothing at international prices.

If farmers were getting international prices, how much your meal will cost you?

(13/n)

What the reasons for this price crash/deflation?

- Demonetisation, GST
- Economic slowdown
- Govt policies
- Declining exports etc.

Demonetisation triggered the crash of all crops simultaneously. It took away whatever little they had before. (14/n)

economictimes.indiatimes.com/news/economy/f…

Now, let's go to the second part of @RahulGandhi's claim. Was money given to rich industrialists?

Let's take Fasal Bima Yojana itself.

Go through insurance partners of PMFBY. Find out how many times their stocks multiplied. You'll be astonished! (15/n)

scroll.in/article/910611…

In fact, PM Fasal Bima Yojana is a bigger scam than Rafale. Mindboggling sums of public money were spent without giving any significant returns to farmers. (16/n)

business-standard.com/article/news-i…

Now, a lot of us feel like solving these issues over Twitter. Ideas like MSP, Technology, etc. might be crossing your minds.

Just 2 Facts:
1. MSP is not applicable to perishable goods (veggies, fruits)
2. Only 5.8% of farmers benefit from the MSP

(17/n)
equitymaster.com/dailyreckoning…

Modi Govt's policy is simple:

"Whoever has will be given more, and they will have an abundance. Whoever does not have, even what they have will be taken from them"

We often boast of being self-made by hard work. Also, do remember these faces who subsidize our meal.

🙏🙏
(n/n)