Policy

Machinery subsidies An illusionary burgling with farmers

It is witnessed that the uneducated farmers visit government departments and plea the authority to grant them subsidies for farm equipments.
Machinery subsidies An illusionary burgling with farmers

In a general scenario it is witnessed that the uneducated farmers visit government departments and plea the authority to grant them subsidies for farm equipments. They undergo several different steps yet hardly a few are blessed with the solution. Let’s dig the difference between the government commitment and the policy where the farm and the farmers suffer.

There has been a continuous debate on the efficacy of various subsidies provided to the farmers. These subsidies which are decided by big corporates and the ministers together in isolation in the absence of farmers – the discussion here is small subsidy provided through agriculture department on agricultural equipments, farm machinery, seeds, fertilisers and drip/sprinkler system.

Fixing subsidy is state jurisdiction

In most states of India, the subsidy is fixed for entire state without considering agro-climatic situation, dominant crops and geographical limitation. The semi arid and arid regions require more preference and support over the area having canal irrigation. There should be more subsidy benefits to the farmers of semi arid area to motivate them and reduce burden on groundwater exploitation. Water determined the agricultural growth of the region and the absence of water for irrigation hits agriculture growth resulting poverty and food insecurity in the region. The subsidy amount should be rationalise considering these situations.

The state governments fix subsidy and their contribution to the total cost of the unit per hectare but don’t consider the quality of the material provided by the different companies except it should be ISI mark which further raise the question on the authenticity and control of ISI mark. The estimate given by various companies to state government is almost similar though quality varies a lot.

On the other hand, the manufacturer producing inferior quality gets same part of subsidy from the department whereas the dealer negotiates with farmers on their part.

“I have seen that dealers of such poor quality produce ready to install system and farm equipment with as low as only 20 percent of farmers share while farmers share is about half of the total cost of the system,” says Manish Bhatt, an agriculture specialist in AIREA.

It’s even witnessed that the government extension workers also advise farmers for these systems as they get some benefits from dealer and easy to meet their target. In case of other companies producing good quality material withstand with their commitment of best quality don’t compromise with rate and farmers has to pay almost three times more money than they are paying for poor companies, adds Bhatt.

Facts behind the story

While general statistics on farmers’ story reveals that the farmers always prefer to pay less irrespective of quality of material he is getting. Thus, in long-run farmers are in loss because of life of the system is very short and he can’t avail subsidy for next five year on same land.
“I tried to understand how the entire system works which is certainly very complex, biased and much beyond the farmers understanding. I would like to describe few facts that I came across while trying to provide farm machineries to farmers. I thought that farmers will be happy to get subsidy and they will have good system at their fields,” shares an agriculture specialist, Pawan Kumar, ICRI.

But it was not so easy as each company, the dealer of the companies, the department representatives and the farmers have their own views, specification, rates, logics and greed to get the system. It is difficult to go in details of each issue came across while handling the process but it is very important to highlight the illusions which I would say fake illusion of dear subsidy. There is need to look in depth the justification of subsidy to the farmers, adds Kumar.

Farm mechanisation

Government as a whole has been trying to push many schemes to bring machinery revolution in the farm industry. Recently, the Department of Agriculture has distributed farm machinery such as tractors and power tillers to 89 small and marginal farmers with a subsidy of Rs 84.75 lakh under National Food Security Mission (NFSM) and National Agriculture Development Programme (NADP).

The farmers were distributed the machinery at subsidised rates as they faced hardship in preparing the lands for agricultural operations during peak season because of labour shortage, mentions R Gurumoorthy, Joint Director, Department of Agriculture, Tamil Nadu.

“It will be taken care that the state control is required so that local manufacturers should not cheat farmers. The subsidy should also be fixed with quality of material and government subsidy should be varied with grade of material that company is providing to farmers. And thus the purpose for that the schemes have been initiated to ensure that farmers were not discouraged from taking up cultivation and the net sown area was not affected, they were being offered support with machineries,” adds Gurumoorthy.

Keeping in view the low level of farm mechanisation for farmers that are available, Chief Minister of Odisha Naveen Patnaik,  says, “As farmers face a lot many problems in the farming, especially in the dry or semi dry paddy fields, the department of agriculture has taken remedial measures to provide seed drill sowing methods and opened up ways for farm machineries to be adopted and practiced by the farmers. The farmers would also be trained to operate the machinery.”

He also informs that the state is even taking enforcement measures to check malpractices in the Public Distribution System (PDS). “Odisha is one of the very few states where detentions have been made under the Prevention of Black Marketing and Maintenance of Supply of Essential Commodities Act. Farmers will get the right benefit and make use of it fruitfully,” adds Patnaik.

Mismatch between government commitment and policy

Grinding the facts between the government commitment and the policies, a whale of a difference can be recorded. On the reality check most companies do lobby before putting quotation to government and rate quoted by them are almost same for all companies. The rate quoted by companies are highly over estimated and accordingly the farmers share also comes very high.

With few companies, it has been observed that farmers share is equal to total cost of the system available in market. If farmers wanted to buy the same unit with same quality from the market, the cost of entire system/unit either equal or less than the farmers share which he has to pay to use government subsidy schemes. This reflects that companies are making huge profit. “One of company representative informed me that company recovers 90 percent of the cost of material with in farmers share and he has to wait for 10 percent only. The company justifies the reason of over estimation is the cost involved for getting approval from state government, money needed to pay to get clear their bill from district level and receiving subsidy just before the end of financial year,” informs Kumar.

It has been recorded that over the years the subsidy is reduced and farmers have to pay more to buy system and farm equipments whereas government is also committed to reduce the farm machinery exploitation. There is mismatch between government commitment and the policy.

Measures to overcome the problems

Companies don’t work directly with the farmers and appoint local dealers. The local dealers use second grade materials to reduce their cost and compensate the same amount with reducing farmers share. Companies have no control over local dealer as target achievement is primary objective than helping farmers.

Prapti Banerjee, an agriculturist research analyst, ICRI, remarks that the company is to provide agronomic support and free maintenance to farmers for three years but it is rarely seen that any representative visits the field after six months of installation.

“The companies need to be tightened up the procedure and follow it. Their target should not be how to increase business of the company rather support the poor farmers. A complete information should be transferred to the farmers and supportive policy should be in practice to provide subsidies to the farmer,” says Banerjee. 

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