Modi talks of 10,000 farmer producer organisations. Will that double income?

Agricultural experts not confident farm income will double by 2022 as targeted

By Joyjeet Das
Published: Saturday 29 February 2020
A godown of Mandla Tribal Farmer Producer Co Ltd. Photo: VIkas Choudhary

Prime Minister Narendra Modi said about 10,000 farmers producer organisations (FPO) will come up in India, at a rally in Chitrakoot, Uttar Pradesh, on February 29, 2020.

Modi is in India’s most populous state, publicising several schemes. He bundled FPOs among other measures such as minimum support, SOIL health cards, neem-coated urea and irrigation projects, as measures to double farm income.

FPOs will help farmers realise proper prices for their produce and unite them. Tribal areas and the 100 aspirational districts will benefit especially, Modi said.

Earlier, the PM had tweeted to spread the word:

The Modi government has projected doubling farm income by 2022 as one of its major goals from early on its first tenure (since 2014). Arun Jaitley, Piyush Goyal and Nirmala Sitharaman have all announced several programmes in subsequent budgets.

FPOs themselves drew attention when Jaitley announced a five-year tax holiday for farmer produce companies in the 2018-19 budget.

The push for crop loans, agricultural insurance and the disbursal of Rs 6,000 per annum to farmers (under PM-KISAN) have all been projected as means towards this end. The agricultural sector, however, has remained steadfastly in trouble amid a weak economy.

The National Statistical Office data released February 27, marked a 4.7 per cent gross domestic product growth for October-December 2019 — a 27-quarter low. Inflation charts have routinely indicated suppressed prices for most food items, indicating poor price realisation for farmers.

Less money in the hands of those dependent on the primary sector of the economy — arguably supporting most Indians — translates to lower purchasing power, which again affects economic growth, forming a vicious cycle. Farmers, meanwhile, have routinely committed suicide.

So will Modi’s announcement on FPOs help in achieving the target to double farm income by 2022? Agricultural experts were not confident.

“The government keeps announcing schemes; what matters is the implementation,” said farm sector activist Ramandeep Singh. The setting up of FPOs will take time before even starting to deliver results, he pointed out.

The measure may be helpful but the asking rate for growth was above the current 4-5 per cent, Singh said.

The government needed to focus more on macro policy on the agriculture sector to achieve its goal, said agricultural policy expert Devinder Sharma. 

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