The unprecedented floods caused by cyclone Fengal in Tamil Nadu in December 2024 resulted in huge damage to crops in 18 districts and massive losses to farmers. After working out the crop damages in the affected districts, the Tamil Nadu government issued an order on February 19, 2025, stating that a total of ₹498.8 crore will be provided as compensation to 5,18,783 farmers affected by the cyclone.
However, the farmers say that the compensation is grossly inadequate, estimated without carrying out a proper survey. Let us find out whether the compensation announced is insufficient.
Per the report released by the government, a systematic survey of the damaged crops in the 18 districts including Cuddalore, Villupuram and Krishnagiri has been conducted. From the survey, a total of 5,18,783 farmers who cultivated agricultural and horticultural crops on a total area of 3.25 lakh hectares in these districts have been identified for relief. Since the estimated area is very low compared to the cultivated area of the districts surveyed, it is not known on what basis the affected area has been calculated.
Inadequate relief
Though there are discrepancies in calculating the area of affected crops, the relief announced for farmers who have completely lost their crops appears to be too low by any standard. As per the announcement, ₹8,500 per hectare will be provided for rainfed crops affected by the cyclone, and ₹17,000 per hectare for paddy and similar irrigated crops. For long-term crops, the compensation will be ₹22,500/hectare. Since the cost of cultivation of most crops cultivated in Tamil Nadu is very high (Table 1 provides cost comparison for paddy for important States) as per the data published by the Commission for Agricultural Costs and Prices (CACP), it is not known on what basis such a low relief has been calculated.
According to the Kharif Price Policy Report 2024-25 of the CACP, which uses scientifically collected data for determining the Minimum Support Prices for 23 mandated crops, the cost of cultivating one hectare of paddy in Tamil Nadu comes to ₹67,064 in terms of cost A2+FL (costs incurred by the farmer from his pocket plus imputed value of family labour), which increases further to ₹88,380/hectare (see Table 2) as per cost C2 (all the expenses incurred for crop cultivation including a fixed cost component).
But the relief of ₹17,000 announced for paddy farmers is not even a quarter of the cost of its cultivation. Per the CACP’s estimate, the cost of cultivating one hectare of rainfed crops like maize, groundnut and cotton in Tamil Nadu varies from ₹63,767 to ₹1,24,493, depending on the cost factor used for the estimation. But the relief announced for rainfed crops is only ₹8,500/hectare.
Also, the relief announced for long-term crops (sugarcane, banana and others) is also too low. The CACP estimate shows the cost of cultivating one hectare of sugarcane in Tamil Nadu varies from ₹1,89,742 to ₹2,49,971. However, the relief announced for long-term crops is only ₹22,500/hectare. If such a low relief is given, how will farmers be able to cover the cost of cultivation?
The Situation Assessment Survey of Farmer Households 2018-19 shows that the income from crop cultivation is very low in Tamil Nadu compared to other major States.
The level of indebtedness among the farm households is also high in the State due to reduced income from crop cultivation. Given this, isn’t it necessary to use scientifically collected data to estimate the relief?
Gaja cyclone story
Similar to the relief announced now, the previous government also provided very low relief to farmers affected by the cyclone, without considering the cost of cultivation of crops. The Gaja cyclone that hit in November 2018 had a devastating impact on farmers in Nagapattinam, Thiruvarur, Thanjavur and Pudukkottai districts. Farmers from Peravoorani and Pattukottai areas, which are known for intensive coconut cultivation in Tamil Nadu, were also badly hit. Coconut trees aged more than 25 years were completely uprooted by the cyclone, but the then government announced a one-time relief of only ₹1,100 per tree, without estimating the expected income from a fully-grown coconut tree.
Crops like sugarcane, banana, paddy, vegetables and flowers were also destroyed by Gaja cyclone, especially in Pudukkottai district. Despite having published data on the cost of cultivation for many crops from the reports of CACP for Tamil Nadu, the then government announced only ₹13,500/hectare as compensation for these crops.
For the future
The cost of cultivating one hectare of paddy in Tamil Nadu is much higher than in other important paddy-cultivating States like Punjab, West Bengal, Uttar Pradesh and Odisha. Therefore, utilising the scientifically collected data, the compensation to farmers should at least cover the costs incurred for crop cultivation.
Unlike earlier, crop cultivation has become cost-intensive. Therefore, instead of assessing crop damage using information from revenue officials and village administrative officers, a committee should be formed with experts in agricultural economics to properly assess crop losses caused by cyclones in order to provide appropriate relief. Compensation should also be given at market rates to those farmers who have lost cattle and other ruminants.
Cyclones and floods are expected to increase due to climate change-related reasons. Therefore, a properly designed methodology should be worked out for collecting and analysing data from affected areas to provide appropriate relief to the affected farmers.
Unlike industry and the services sector, the growth of agriculture in Tamil Nadu has not been very encouraging when compared to that of other major States during the last 30 years or so. Because of reduced income from crop cultivation, the area under fallow land has been increasing at a much faster rate in Tamil Nadu than in other major States.
Policymakers should not forget that if adequate compensation is not provided for crop damages caused by cyclone and floods, there are possibilities that the area under cultivation will decrease, which may reduce food production and increase inflation in the State.
The writer is former full-time Member (Official), Commission for Agricultural Costs and Prices, New Delhi. The views are personal
