Farmers stare at another loss despite good rains. They need a boost from govt

Indian farmers have accumulated huge debts due to crop damages and less remunerative price for produce

By Richard Mahapatra
Published: Thursday 09 January 2020
Indian farmers need government intervention. Photo: Vikas Choudhary

When the National Statistical Office released the advance estimate of gross domestic product (GDP) growth for the 2019-20 fiscal year, the optimism for farmers — with an above-normal monsoon — fizzled out. India’s GDP growth for the current financial year was pegged at 5 per cent, the lowest in 11 years.

In 2018-19, the GDP grew at 6.8 per cent. 

Every sector of the economy has slowed down; but what worries the most is the continuous decline in the agriculture sector, which employs around 42 per cent of Indians.

This will be the second consecutive year the farm sector has not registered significant growth. In 2019-20, it was expected to grow at 2.8 per cent; in the last financial year, it was 2.9 per cent. It is stagnating, one can argue. 

In 2019-20, farmers suffered huge losses in terms of trade and earning. In absolute terms, GDP from agriculture in the third quarter was Rs 3.65 lakh crore. In the second quarter, it was Rs 4.34 lakh crore.

It means between two quarters, or six months, agriculture GDP dipped by Rs 68,386 crore. This economic loss is to be borne by farmers, who comprise a significant part of India’s poor. 

Worse, this comes at a time when they have accumulated huge debt. This is mostly due to consecutive losses because of crop damages and less remunerative prices for produce.

In the last six years, farmers have endured four below-normal monsoons and widespread extreme rainfall events.

There is a perception that agriculture production is on the rise; Records are broken almost every year. 

But the production growth rate has been dipping: During 2009-14, food grain output increased at an average 5 per cent annually. In the next five years, this fell to 3 per cent.

Between 2011-12 and 2017-18, there was a 40 per cent of drop in farm workforce. 

The advance estimate for the economy has another bad news for farmers, who have been doubling up as migrant daily-wage labourers to sustain a basic minimum living standard.

One of their biggest alternative sectors of income is the construction in urban areas and of public infrastructure. But the construction sector in 2019-20 is estimated to grow by only 3.2 per cent, down from 8.7 per cent in the previous financial year.

There are already talks of a government stimulus for the private sector to boost the economy. In the last one year, many corporate- friendly tax incentives have been declared. However, besides the cash support of Rs6,000 per farmer in three instalments, there is no other scheme or plan to boost the agriculture sector.

Just as the private sector has got doles from the government to boost demand, farming communities — who are also consumers — need a booster or a new deal to revive their economy.

Nitin Gadkari, the Union minister for micro, small and medium enterprises, recently announced a grand plan to revive the rural economy. The government aims at increasing the turnover of the rural economy from the current Rs 1 lakh crore per annum to Rs 5 lakh crore by incentivising local produce and processing, he said.

But Gadkari failed to provide details on how this leap in the rural economy would be achieved.

The government has committed that by 2022 it would double farmers’ income, which has been decreasing in recent years. Farmers hope this doesn’t become one of the government’s many well-known grand promises without a vision to effectively achieve them.

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