Will diesel subsidy help farmers tide over drought?

National Rainfed Area Authority reports excessive withdrawal of ground water; many farmers have abandoned their crops

The first decision of the Empowered Group of Ministers (EGoM) that met to take stock of the current drought was to declare a diesel subsidy for farmers. Those who have been monitoring India's drought management will know this is the first crisis ritual. This is to save the standing crops, which would otherwise be lost due to water scarcity. But the question, as during earlier droughts, is: does diesel subsidy help? The question is often asked for the simple reason that more than 60 per cent of India's cultivable lands are rainfed. So, who is the subsidy meant for? The answer, as already known from earlier experiences, is that diesel subsidy gives maximum political mileage and least relief.

First, what the government offers. Like in previous years, the subsidy is for farmers who operate diesel pumps (remember, this is the argument for overall diesel subsidy in the country and government has abandoned the much talked about subsidy cut in recent weeks due to the drought). The subsidy will be shared by the Central and state governments equally. It is only for areas where rains have been 50 per cent below average up to July 15. The scheme will continue till September. But usually there is a ceiling on how much an individual farmer can avail and for how much area. Though details are still not available, the subsidy may be around Rs 1,500 for each farmer and for up to two hectares of land.

Conditions apply

The subsidy is subject to a few conditions: a) rainfall must be below 50 per cent by mid-July; b) a farmer must have an operational diesel pump using a groundwater source; c) subsidy amount and the land area should be within a limit.

These conditions make this highly visible government step redundant or say just beneficial to a small group of farmers. Going by the first condition of rainfall, currently farmers in severely impacted states like Punjab, Haryana, Karnataka, Rajasthan and Gujarat will be benefited. Some 94 out of total 627 districts will qualify for this. But except for Punjab and Haryana, most of the farmers in majority of the districts in other states depend on rain for irrigation. About 80 per cent of horticulture-based livelihoods and 100 per cent of forest produce are rainfed in these areas. Less than six per cent of total diesel consumption in the country is used for irrigation.

So, the subsidy is meant for well-endowed farmers. However, this is not to discount the loss such farmers sustain. The third condition, practically meant for relatively big farmers in terms of landholding in Haryana and Punjab, is highly limiting. Given the scale of loss of standing crops, the monetary limit will hardly rescue farmers. The crops division of the agriculture ministry has already hinted that the diesel subsidy will only help Punjab and Haryana to some extent.

According to advisory note of the National Rainfed Area Authority (NRAA) issued in last week of July, the subsidy will not help much even in irrigated areas given the severity of the drought. In the last 60 days of monsoon (June and July), above normal rainfall was received only on eight days, normal rainfall was received on five days and there was rain deficit on 46 days. It means most of the severely impacted areas continue to have substantial rain deficit. As a coping mechanism, there has been excessive withdrawal of ground water, according to the NRAA leading to “lowering of submersible pump by three to four metres, replacement of low horse power motors with higher horse power motors and excessive consumption of electricity/diesels oil is being reported from North-West India”.

Farmers, thus, have already invested significantly on saving their crops in irrigated areas. Many have abandoned their crops. “Shortfall in sown area and poor condition of already seeded/planted crops suggest agricultural drought in Maharashtra, Karnataka, Gujarat and Rajasthan. The assured irrigated areas are being afflicted with high cost of pumping ground water and retrofitting,” observes NRAA. The diesel subsidy will hardly rescue them from this.

Rather, the subsidy will further worsen the situation due to further uses of groundwater without any water recharge in the near future. “It is also likely that there may be excessive depletion of ground water and its recharging during high rainfall events in the current year and subsequent years should also be put in place to restore excessive depletion of groundwater,” says NRAA.

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