Forbes India 15th Anniversary Special

Budget reactions: Govt fails to bring relief to Karnataka's silk farmers

Major issues concerning them remain unaddressed; they want the government to look at the larger picture

Naandika Tripathi
Published: Feb 1, 2019 04:44:41 PM IST
Updated: Feb 1, 2019 11:05:17 PM IST

Budget reactions: Govt fails to bring relief to Karnataka's silk farmersImage: Naandika Tripathi
Last month, Forbes India travelled to three agri and small enterprise hubs to gauge the pain of business owners, farmers and workers and the expectations they had from the interim budget. We revisit the distressed Marathwada region, the silk hub of Ramanagara and the diamond traders in Surat to see whether the last budget before the general elections lived up to their hopes.

Location: Karnataka (Ramanagara district)
Industry: Silk
Size: Turnover at the Government Cocoon Market, Ramanagara (2017-18): Approx ₹500 crore

Silk farmers at Ramanagara, Karnataka are unable to fetch desirable prices for their cocoons. They have been demanding an organised market to sell their raw silk.

The silk industry in Karnataka has been facing a lot of issues, including lack of technology and rise in import of raw silk from China. Exports have declined by 15-18 percent each year in the past five years. Besides there is a major decline in the demand and price of cocoons due to the availability of higher quality raw silk from China. As a result, the number of silk reelers has reduced from 14,000 to 6,540.

Import duties on Chinese raw silk stand at 11 percent, and the landed cost works out to ₹4,800 per kg. Local raw silk is available for ₹4,600 per kg. The price of raw silk in India depends on the selling price of Chinese silk and it varies accordingly. Silk farmers and reelers have been asking the government to reduce the import of raw silk from China.

In Budget 2019 on Friday, Finance Minister Piyush Goyal said poor land holders need structured income support. Therefore, a scheme called PM Kisan Samman Nidhi was announced, under which farmers owning up to 2 hectares will get ₹6,000 per year. The money will be transferred directly to their accounts in three tranches. The package will cost the government ₹75,000 crore.

But farmers in Karnataka are not satisfied. “It is a great move by the government and we appreciate it, but that is not going to reduce our problems. Previously, we used to get ₹500 per kg for our cocoons which has come down to ₹300 per kg; their demand has gone down due to the import of raw silk from China. We want the government to its import from China… that will really help us,” says Shivanand Kere, a farmer from Tumkur, Karnataka.

“Since this was an interim budget, not much was expected. However, there were still some announcements which will benefit the farmers. For imports and exports in general, nothing was announced, so we’re expecting something after the elections,” says Bimal Mawandia, chairman, The Indian Silk Export Promotion Council. RR Okhandiar, CEO member secretary, Central Silk Board, says, “More disposal money in the hands of middle-class people will result in a further increase in demand of silk products.”
Silk farmers wants the government to look at the larger picture and bigger issues concerning them. 

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