How to double India’s farmers’ income?

Why in News?

• In 2016, the PM of India shared his dream of doubling farmers’ incomes in the year (2022) when India completes 75 years of Independence and enters Amrit Kaal.
• The article investigates whether it is appropriate now to determine whether the dream has been realised, and if not, how best it might be accomplished.

 

How to Double India’s Farmers’ Income (DFI)?

• In this regard the Government of India had constituted an Inter-Ministerial Committee (in April, 2016) to examine issues relating to DFI and recommended strategies to achieve the same.
• The Committee submitted its final report in 2018 containing the strategy for DFI through various policies, reforms and programmes.
• To achieve the objective, the Committee identified following seven sources of income growth:
  • Increase in crop productivity
  • Increase in livestock productivity
  • Resource use efficiency – reduction in cost of production
  • Increase in cropping intensity
  • Diversification to high value agriculture
  • Remunerative prices on farmers’ produce
  • Shift of surplus manpower from farm to non-farm occupations
• The premise of the strategy is based on the following primary principles:
  • Increasing total output across the agricultural sub-sectors through realising higher productivity
  • Rationalising/reducing the cost of production
  • Ensuring remunerative prices in the agricultural produce
  • Effective risk management
  • Adoption of sustainable technologies.

 

What are the Initiatives Adopted and Implemented for DFI?

• Unprecedented enhancement in budget allocation: The Budget allocation for the Ministry of Agriculture and Farmers Welfare (MoAFW) increased from only Rs. 25460.51 crore (2015-16) to Rs. 1,38,550.93 crore in 2022-23 (by more than 5.44 times).
• PM Kisan Samman Nidhi (PM KISAN): Launch of PM-KISAN in 2019 - an income support scheme providing Rs. 6000 per year in 3 equal instalments. More than Rs. 2 lakh crores have been released to approximately 11.3 crore eligible farmer families.
• Pradhan Mantri Fasal Bima Yojana (PMFBY): Launched in 2016, the scheme is an insurance service for farmers for their yields. In the last 6 years, for every 100 rupees of premium paid by farmers, they have received about Rs. 493 as claims.
• Institutional credit for agriculture sector: Increased from Rs. 8.5 lakh crore in 2015-16 with a target to reach Rs. 18.5 lakh crore in 2022-23.
  • Benefits through Kisan Credit Cards (KCC) at 4% interest per annum have also now been extended to Animal Husbandry and Fisheries farmers for meeting their short-term working capital needs.
• Fixing of Minimum Support Price (MSP) at one-and-a-half times the cost of production: For example, MSP for Wheat increased from Rs. 1400 per quintal in 2013-14 to Rs. 2125 per quintal in 2022-23.
• Other initiatives: Promotion of organic farming in the country, Per Drop More Crop, Micro Irrigation Fund, Fertiliser subsidies, Promotion of Farmer Producer Organisations (FPOs), e-NAM, Launch of the National Mission for Edible Oils - Oil Palm, etc.

 

What are the Achievements of Government's Efforts Towards DFI?

• The Ministry of Statistics and Programme Implementation [National Statistical Office (NSO)] conducted a Situation Assessment Survey (SAS) of Agricultural Households in the rural areas of the country.
• From these surveys, estimated average monthly income per agricultural household as obtained from NSS 70th round (2012-13) and NSS 77th round (2018-19) was calculated as 6426/- and Rs.10,218/- respectively.
• This means implementation of these schemes have yielded remarkable results towards augmenting the income of the farmers.

 

What would be the Implications of DFI?

• Sustained high growth: Agriculture engages the largest share of the workforce (45.5%). So, focusing on agriculture is the right way to ensure long-term high growth of the overall economy.
• Ensuring food and nutritional security: This becomes very important as India is going to overtake as the most populous country soon.

 

What are the Concerns?

• Impact of subsidies on environment: Subsidies from fertilisers, power to farm machinery for custom hiring centres, if combined, would easily cross Rs 4 lakh crore per annum.
  • Overuse of fertilisers or pesticides can result in soil degradation, groundwater depletion and other negative environmental impacts.
• Policies of “implicit taxation” of farmers’ incomes: For example, unloading 2.5 MMT of wheat right now to bring down prices of wheat in mandis, so that the government can buy at MSP, which is lower than the market price.
• Pro-farmer vs pro-consumer approach: While input subsidies do help raise farmers’ incomes, there could be output trade and marketing policies that suppress farmers’ incomes. For example, the ban on exports of wheat. 

 

Way Ahead:

• DFI must encompass policies that also protect the basic resources of this planet, say soil, water, air, and biodiversity.
  • Millets, pulses, oilseeds, and much of horticulture could perhaps be given carbon credits to incentivise their cultivation. They consume less water and fertilisers.
• The CAG should take up the audit of all subsidies given by the Centre and states to examine their outcomes in terms of the incomes of farmers and environmental consequences. 

 

Conclusion

• The bottom line is that we need innovations in technologies, products, institutions and policies for more diversified high-value agriculture that is also planet friendly.
• On the question of doubling farmers’ income, we must realise it is going to take time.

 

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Q1) What is the Minimum Support Price?

Minimum Support Price (MSP) is the minimum price guaranteed by the government to the farmers for their crops to protect them from market fluctuations and ensure a stable income. It is fixed for various crops based on the recommendations of the Commission for Agricultural Costs and Prices (CACP).

 

Q2) What is KCC?

Kisan Credit Card (KCC) is a government-sponsored scheme in India that provides farmers with a credit card to meet their agricultural credit requirements. It aims to provide timely and adequate credit to farmers to meet their production and investment needs.

 

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Source: Indian Express