Agriculture

Can farm income be doubled by next year

Agricultural sector will require an annual growth rate of 10.4% to achieve the target. But for the last few years, this rate has remained between 2.8% and 3.4% 

 
By DTE Staff
Published: Sunday 21 February 2021

Indian Prime Minister Narendra Modi, on February 28, 2016, had announced that by the time India celebrated its 75th Independence Day in 2022, its farmers’ income would have doubled. 

The Union Budget 2021-22 presented on February 1, 2021 was, in fact, the penultimate budget before this deadline. It was a great opportunity for the Union government to outline what it had been doing to achieve this target, or at least give an overview on the status quo and how far the country had come to materialising the ambitious dream.  

But niether the budget document nor the speech presented any details of the farmers’ current income levels. The matter found a brief mention in Union Finance Minister Nirmala Sitharaman’s budget speech, but that was all.

Union agriculture minister Narendra Singh Tomar and Home Minister Amit Shah have reiterated that the budget was aimed at achieving that target. But a report card has been elusive.

A report by the standing committee on agriculture submitted to Parliament in March 2020 had said that the Union government asked all departments to work towards this goal. The Indian Council of Agricultural Research (ICAR), as part of the initiative, prepared plans for each state and sent them for implementation.

But details on how states needed to work or the Union government needed to analyse the progress were absent. According to the same report, ICAR had decided in 2017 to adopt and develop two villages as model villages in each district of the country so that state governments could follow the practices and frame its own policies to double farmer incomes in other villages. 

But Down To Earth’s visit to some of these villages signified there was little or no progress on this front. In some villages, farmers didn’t know of any such scheme. They did not even know that their village had been selected as a model village.

In other areas, where farmers did have the knowledge, they said their income declined in the last few years due to multiple reasons.

There is absence of sufficient information on farmer’s income as well. The most recent estimate were done in a study by ICAR in 2015, according to which farm income per cultivator in 2015-16 was only Rs 44,000 in real prices. This income took almost 22 years to double from a little over Rs 21,000 that the farmers used to get in 1993. 

By government’s own admission, agriculture will require an annual growth rate of 10.4 per cent to achieve this target. But for the last few years, this rate of growth has remained between 2.8 and 3.4 per cent.  

There are a few sources that are crucial for achieving this target, according to Niti Ayog’s action plan document. These include increase in crop productivity, saving cost of production, increase in crop intensity and crop diversification, among others.

But if we see the rate of growth of these factors and compare them with the required rate for doubling of farmer’s income, it doesn’t give much hope. For example, the growth rate for crop productivity is 3.1 per cent; the required is 4.1 per cent.

Similarly, the growth rate of crop diversification is 3.89 per cent and the required is 5.17 per cent.

The allocations in agriculture sector in the Union budget also do not inspire much confidence in achieving this goal. There is a stagnation or decline in allocation of almost all flagship or essential schemes of the government. 

Even the much publicised Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), a direct cash transfer scheme for farmers, has a lower revised expenditure of Rs 10,000 crore than the budgeted estimate for 2020-21.

The issue of minimum support price (MSP) has too been contentious. Protesting farmers have demanded its legal sanction while the Union government has attempted to reassure them that the MSP regime is here to stay.

The budget allocation towards it, however, was dismal and far from encouraging farmers of the government’s word.

Market Intervention and Price Support Scheme (MIS-PSS) as well as Pradhan Mantri Annadata Aay Sanrakshan Yojna (PM-AASHA) are the two schemes that ensure the implementation of MSP.

But they have seen continuous reduction in allocations the last two years: Allocations under MIS-PSS for 2021-22 were halved than previous years’. Similarly, allocation under PM-AASHA came down 73 per cent in this year’s budget, compared to what it was two years before.

Amid extreme rural distress, experts have time and again called the plan unrealistic. The Union government had earlier said that the new farm laws will help it achieve the target. While that is debatable, the laws are currently on hold. 

Does the absence of a current status in this year’s budget or the government’s next plan of action on this indicate that it was mere sloganeering? Does it imply that the target is not achievable?

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