Doubling farmers’ income would require effective contingency plan for bad weather, proper farm credit system, effective crop insurance, affordable input cost, adequate market access, sufficient warehousing and storage facilities and price support. Undermining these factors would lead to failure of this ambitious plan. MOHD MUSTAQUIM analyses the scope and prospects of the scheme
The government plans to double farmers’ income by 2022, however, ground realities are shocking and raises several questions pertaining to achieving this target. In the last week of August, Sudhakar Darade, a 52-year old farmer in Nashik district in Maharashtra dumped his 1,300 kg onions in his field as he was offered only Rs 65 at the rate of 5 paise per kg in the local APMC market. He had spent Rs 13,000 for producing his crop, the price had left him with a shock. Doubling farmers’ income sounds good, but recovery of production cost still looks illusive.
The situation is no different in other parts of the country. In the first week of July, farmers in the Seemanchal region of Bihar transplanted their paddy crop by irrigating their fields through expensive diesel pump sets due to insufficient rain and lack of irrigation system. In contrary, within 15 days, the region faced 10 days long devastating floods due to heavy rainfall in the upper Himalayas which washed away their infant paddy crops including kuchcha houses. Here again, there was no flood control measures. Crop insurance could have rescued them, unfortunately life insurance is still is a hear-say word for them.
According to Sushil Kumar Singh, BJP MP, Loksabha, doubling farmers’ income is a distant dream as we have failed to ensure that the farmers at least get the cost of production. Shortage of water, labour, adverse climatic activities, drought, floods, thunderstorms, hailstorms are the key challenges faced by the farmers.
The Bumpy Ride
With a corpus fund of Rs 86,500 crore for Pradhan Mantri Krishi Sinchai Yojana (PMKSY) for next five years, the Government had announced in the annual budget for year 2016-17 to double farmers’ income by 2022. The PMSKY has a target to bring 2.85 million hectare cultivated area under irrigation. Besides, the programme would fast track 89 stuck irrigation projects under Accelerated Irrigation Benefits Programme (AIBP) and help irrigate another 8 million hectare cultivated area. However, out of 141 million hectares of net cultivated area, according to World Bank, only 50 million hectares are now irrigated, rest of 91 million hectares remain rainfed.
If we go by the five years’ target of PMKSY, if it is implemented with 100 percent success rate, it would irrigate 2.85 million hectares as well as 8 million hectares stuck AIBP projects, at a rate of 2 million hectares per annum. At this pace, India will be able to irrigate its remaining rainfed cultivated area in another 45 years only. Thus, the PMKSY slogan ‘Har khet ko paani’ (water to every field) remain incomplete without suffixing ‘in 45 years’.
Though foodgrain productivity jumped many folds since independence – from 51 million tonnes in 1947-48 to over 260 million tonnes in 2013-14, however, its benefits hardly reached to the farmers.
“Post independence, to feed 35 crore people we were food deficient and dependent on imports with no foreign exchange reserves. Famines were the frequent event. But, thanks to the policymakers, scientists and progressive farmers, by 1982, we became food sufficient. Now, after feeding 125 crore people, we are the exporter and number one producer of many agricultural produce. But, after Green Revolution days, we could not keep momentum of that agricultural growth,” says Dr. HP Singh, former Vice Chancellor of Rajendra Agriculture University and Chairman of Confederation of Horticulture Associations of India (CHAI).
By and large, agricultural policies, their implementation, deep-rooted corruption on service delivery, no effective contingency plan for bad weather, poor farm credit system, ineffective crop insurance, high input cost, poor market access, traders dominated markets, lack of warehousing and storage facilities, discouraging minimum support price, among various factors have played crucial role in pushing Indian agriculture into distress.
According to the figures of Parliamentary Standing Committee on Agriculture, in 2013-14, the average annual income of farmers were Rs 74,380 while they had a loan of Rs 47,000 from banks and Rs 12,130 from local moneylenders. It left only Rs 15,250 with the farmers which they paid in the form of interest of their loans. In this scenario, they are on zero. This may not be the case of entire farming community, but the offering 5 paise per kg for onions is actually telling a tale of farm distress. The agriculture experts opine that in such a scenario with additional woes of sluggish government schemes, the doubling farmers’ income seem to be a political gimmick rather than a reality.
Some experts believe that inflation itself will double the income of farmers in next five years. Ram Kaundinya, senior agriculture expert and board member of global agriculture giant, Syngenta India says, “Only doubling farmers’ income in next 6 years will not have any importance as inflation will automatically double the incomes. The question is that how farmers’ profits can be doubled?”
It has been a big question for decades that what went wrong with the India’s largest community? Why is food growers of the country pushed to the distress? According to the figures of PSC-Agriculture, among the people practicing agriculture in 1951, 71.09 percent were farmers and 28.91 percent were farm labourers. By 2011, the percentage of farmers dropped sharply to 45.1 percent as 26 percent of them lost their lands which forced them to be farm labourers.
The 68 percent of agricultural land in India are drought prone. Thus, the shortage of water and irrigation facilities are the most prominent challenges Indian farmers have been facing. In the seven decades, the country have been able to provide water only to its 35 percent cultivated land. In some regions, farmers irrigate their crops by highly expensive diesel pump sets. It increases their cultivation cost to that level where it become challenging for them to recover the spending. If they do not look for alternative and expensive irrigation facilities, they can only do farming in the monsoon season. Thus, in the majority of rainfed areas, farmers follow single cropping pattern. In the non-rainy season they have to depend on daily wages, migration or government’s social sector programmes.
Though as per the Reserve Bank of India’s mandate, all commercial banks are bound to finances at least 18 percent of their total lending to agriculture sector, however, it has always been considered as a bad debt for bankers due to declining farmers’ income. Within the 18 percent agriculture credit, cold chains, warehousing and ancillary services were already part of it. In April 2015, the Government included food processing sector within agriculture credit.
Raising concerns, some sections of agriculture sector say that the funds meant for farmers were already taken away by the cold chains, warehousing and ancillary activities. Now, food processing sector would also claim its share. It would create more problems for the farmers.
The Minimum Support Price has also been discouraging farmers over the years. For example, MSP of A grade paddy was increased from Rs 1,400 per quintal in 2014-15 to Rs 1,450 in 2015-16, a rise of 3.5 percent. The MSP of Tur dal was recommended by CACP from Rs 4,350 per quintal in 2014-15 to Rs 4,425 per quintal in 2015-16, hike of 1.72 percent. Later, the Cabinet Committee of Economic Affairs added Rs 200 as bonus which increased the MSP to Rs 4,625, made possible to 6.32 percent total hike. The increase in MSP has comparatively lower than the inflation and increasing cultivation cost. Lets see how MSP is determined for Kharif season 2016-17. In every industry, the prices are determined by the producer, but farmers have no say in determining prices of their produce and completely dependent on external forces.
Animal husbandry is an integral part of agriculture. It is the booster for rural economy. Cattle are the source of protein. Even their dung is very much helpful for agriculture. It maintains the organic carbon and increases the water holding capacity of the soil. When, cows become unproductive, it has been a tradition with farmers to sell them which fetches Rs 8,000 to Rs 10,000. It gives a farmer an additional income which means big for a small or marginal farmer.
Making increasing farmers income a reality
Innovation, technology and good market access are key for success. The government and Industry should join hands for rapid agricultural growth. To counter the frequent adverse impact of climatic disruptions, there is a need to develop climate resilient varieties. Beside, a plant protection system in which farmers can grow food with lesser application of pesticides needs to come into place. There is a need to aware farmers for agricultural schemes so that they can avail the benefits. The crop insurance scheme, Pradhan Mantri Fasal Bima Yojana needs to be implemented wholeheartedly by covering maximum number of farmers, especially small and marginal ones.
While discussing the doubling farmers’ income, there is a need to discuss the background of the agriculture sector how it is vital for India’s socio-economic development. “Though, agriculture accounts for only 13 percent of India GDP, it’s providing livelihoods to half of country’s population. Besides, the sector is a market for seeds, fertilisers and agri machinery industries which takes the role of agriculture in GDP to 36 percent. Further, it supplies raw material to the food processing industry, which accounts for 5 percent of the GDP,” says Dr. Singh.
He further adds, “At first, we need to boost the agriculture sector which will certainly boost the agribusiness sector and socio-economic development of the country. If agriculture will not grow, these industries will also face the heat.”
Climate change is going to affect the agriculture adversely not only in India, but, across the world. However, working on biotechnology has many persistent challenges. Kaundinya says, “Biotechnology is expensive and time consuming. If an organisation does R&D in any particular technology and within the period, the Government brings regulatory changes or the technology is not accepted, the organisation will not be able to invest further in the technology. Thus, there should be a certainty and harmony in the regulatory mechanism.”
Farmers’ income needs to be increased on sustainable manner. While attaining the persisting challenges, the rural youth and kids of farmers need to be imparted training of running food processing units in the villages. These small food processing units would put a check on distress sell of farm produce and also generate employment in the rural areas.
As agriculture is a State subject, the Central government only provides funds for various scheme while implementation is done by the State governments.
Thus, eliminating all kinds of corruption in service delivery, the States need to make their machinery effective so that farmers get the benefits. The policymakers, industry, academia will have to work together to find out the way outs for making farming profitable. Any initiative which increases farmers’ income is a welcome step. Lets see how these efforts become a reality in the coming years.