Not Just A Pipe Dream
The farmer could only get richer, say statistics, even as the debate on doubling farmers’ incomes reaches a crescendo
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Prime Minister Narendra Modi was addressing a kissan rally (congregation of farmers) in UP’s Bareilly on 28 February, 2016, when he declared that his dream was to see the income of farmers double by 2022 — when independent India turns 75. The Prime Minister was obviously speaking of doubling the income of the farmer from what it was in the agricultural year 2015-16 seven years hence in the agricultural year 2022-23. If he indeed was, then he was budgeting for a 10.4 per cent growth in agriculture every year.
Economists across the political and dogmatic spectrum have since pontificated and debated on the practicality of the Prime Minister’s dream, especially after the Economic Survey for 2017-18 predicted a 2.1 per cent growth in farm output. In the penultimate year of the National Democratic Alliance (NDA) government’s tenure, doubling the farmer’s income is no longer a wish. It has assumed the proportions of a policy.
“Yes there are many new and impressive initiatives by the NDA but the agriculture GDP is still not providing the desired results,” says Siraj Hussain, former Secretary, in the Union Ministry of Agriculture and Farmers’ Welfare. Hussain’s scepticism is shared by others too. “Many experts do not believe the vision of doubling farmers’ income as practical,” writes Niti Aayog member Ramesh Chand, in his 2017 paper titled, Doubling Farmers’ Income: Rationale, Strategy, Prospects and Action Plan.
“Again, it is important to clarify what is sought to be doubled,” says Chand, “Is it the income of farmers, or the output or the income of the sector or the value added or GDP of agriculture sector? If technology, input prices, wages and labour use could result in per unit cost savings then famers’ income would rise at a much higher rate than the output. Another very important source of increase in farmers’ income is the relative increase in prices of farm products compared to the prices of non-agricultural commodities.”
Chand points out that agricultural output at constant prices had increased by 34 per cent during 2004-05 and 2011-12, while the real farm income per farmer had increased by 63 per cent (Chand et. al. 2015 p.142). “In nominal terms, the output became 2.65 times while farmers’ income tripled in the seven years period,” says Chand. Then he spells out the crux of the Prime Minister’s message. “Therefore,” he writes, “doubling of farmers’ income should not be viewed as same as doubling of farm output.”
Farm income has been growing at different rates, in tandem with the growth rate in output, increase in wage bills and the prices of agricultural produce etc. (Please see chart). Some factors have changed imperceptibly, like the steady rise in horticultural (read fruits and vegetables) crop production. The implementation of the Swaminathan Commission report, (pegging the MSP to the cost of cultivation plus a return that is 1.5 times higher) too has been a tremendous boon to the farmer.
The Union Budget for 2017-18 made a provision for Rs 2,000 crore for 22,000 agricultural markets and APMC (agricultural produce market committees) by 2022. The scheme should be able to create a completely interconnected market, linking small and marginal farmers, who make up 85 per cent of the farming community. Allocation for the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) was as high as Rs 48,000 crore.
At the National Conference on Doubling Farmers’ Income on 21 February, 2018, the Prime Minister said, “Till date, more than 11 crore farmers have been given Soil Health Cards. There has been an increase in productivity due to the Soil Health Card. Now the farmers are aware of the amount of fertilisers required depending on the soil.”
“The Soil Health Card Scheme of the present regime is proving extremely beneficial to the farmers,” says Rajesh Aggarwal, Managing Director of Insecticides India, “as farmers are able to grow the right kind of crops as per the soil in their farms,” Aggarwal also lauds the expansion of 250 National Agricultural Markets (e-NAM) to 585 Agricultural Produce Market Committees (APMCs). “The present government’s efforts to bring more cropped area under insurance is good for the farming community,” he says. Siraj Hussain too sees the eNAM and the Pradhan Mantri Fasal Bima Yojna as boons for the farmer.
Election year gig?
Even so, cynics see the policy statement of doubling the farmer’s income as a stereotyped outreach gig of a political regime serving the last of its five-year mandate. The bulk of India, after all, still resides in the villages, where agriculture provides employment to 62.7 per cent of the country’s population. Compare that with the 77.6 per cent of the Indian population that was hinged to rural employment in 1993-94.
Over the years, agriculture’s share in India’s gross value added (GVA) has declined, dropping from 18.5 per cent in 2011-12 to 15.2 per cent in 2016-17. “Agriculture was and will always be a sensitive nerve,” says S. S. Acharya, former chairman of the Commission for Agricultural Costs and Prices (CACP) and indeed, the farmer has been the beneficiary of political largesse down the ages.
The core focus of the Atal Bihari Vajpayee Cabinet (1998-2004) had been infrastructure development, but it also distributed Kisan Credit Cards to 3.5 crore farmers for the first time. The volume of horticultural credit almost tripled from Rs 30,000 crore to over Rs 90,000 crore then. Farmers were offered life insurance and insurance for disability. The NDA regime led by Vajpayee also raised the minimum support price (MSP) for 25 different crops.
The United Progressive Alliance (UPA) government led by the Indian National Congress (INC) (2004 -2014) encouraged rapid urbanisation, but the shining feather in its cap was MGNREGA, which enhanced rural income by providing seasonal employment to farmers in between crop cycles. The election manifesto of the BJP in 2014 said: “Agriculture is the engine of India’s economic growth and the largest employer, and BJP commits highest priority to agricultural growth, increase in farmer’s income and rural development.” In 2016 Prime Minister Modi announced a mission to double the income of farmers across seven years.
The present government’s focus has been on increasing the productivity of the land, diversifying into high-value crops and better trade facilities for farmers. “We are working on mission mode to fulfil our commitments,” says Union Minister for Agriculture and Farmers’ Welfare, Radha Mohan Singh.
Ashok Dalwai, CEO of the National Rainfed Area Authority (NRAA) says, “Over these four years, the policy has transitioned from a partial approach to a more wholesome systems approach towards agriculture. Various strategic interventions are broadly defined by an income approach to transformation of agriculture.”
The government’s emphasis on monetisation of the produce (a whopping 280 million tonne foodgrain production alone in 2017-18) through upgraded agri-logistics, improved marketing efficiency and developing the country as a unified agricultural market, were other measures that would enhance farmers’ incomes, says Dalwai. The country, he says, was heading toward an ‘Income Revolution’ rather than a ‘Green Revolution’.