• News
  • Columns
  • Interviews
  • BW Communities
  • Events
  • BW TV
  • Subscribe to Print
BW Businessworld

Solution To Farm Distress Simple; But Not Easy

Half-hearted and often populist schemes only increase the distress. The focus should move from outlay to outcome and from input to payoffand

Photo Credit : PTI


Our farmers are distressed. And like their brethren in rural India have little access to basic needs, and live in abject poverty. It shouldn’t be so.

Let’s say it a little more emphatically. Farmers are half of our workforce, create a seventh of our national produce, earn a fifth of  what others do and grow at a third. Whichever way you slice and dice the data, they remain dismal and very gloomy, revealing the suggestive and concealing the vital.

Indian politics is first and foremost about the farmer. It is the path to power. Every political campaign is both cored and concentrated around farmer distress: loan waivers, direct money transfer, doubling income, MSP etc.
The feeders to the nation are exploited.  

Most policy makers don’t understand the agri statistics, fewer appreciate it. The farmers’ plight is because of declining incomes, consuming the agri sector too. An RBI study articulates this well. Rural wages have been in deceleration since 2014, and real wages are at a five-year low.

Solution: increase farm income.  Unfortunately, the government’s half-hearted and often populist schemes only increase the distress. The focus should move from outlay to outcome and from input to payoff. Rewarding the outcome is more equable.
Unfortunately, most see the MSP as intended i.e. the state’s stated mission of providing assured prices to farmers. But without holistic ecology, it has grievously remained only intent.

Data from the NSSO reveals it audibly. Let’s listen.

Only 25 per cent of farmers are aware, and less than six per cent ‘market’ at MSP. Only two crops; paddy and wheat are sold at MSP, and that too only a third of each. Loan waivers are a boon to rich farmers and push the smaller farmers toward non-formal and expensive credit, lowering their productivity and income, subtracting value from the economy. This vicious cycle kills their spirit and often their life.

Farmers always lose .There you have it.  

The new government must create robust holistic, reformist and farmer-centric agri policies, which will catalyse rural development:
* Reform agenda must include efficient, effective and pro-farmer land reform that integrate, consolidate, and yet ensure ownership.
* Expand storage facility that ensure ‘holding’ and bargaining power. Thereby; fair price discovery. Focus on efficient water usage.
* Effective backward and forward linkages, infrastructure status to agricultural support systems, setting up SPVs that invest in technology, market, logistics for and behalf of  the farmers on a BOT model will create agri- entrepreneurs.
* Similarly, the investment in e-markets will help decimate the buyer cartelisation, increasing the income of  the farmer on the one hand and reducing the cost to the end user on the other. Information flow from the e-markets will also help standardisation, leading to better quality.
* Another important and necessary component of the ecosystem must be insurance. Farming is a risky endeavour, with several moving parts, with no control on most.
The government must take away the ‘risk’ out of farming. A minimum return to recoup the costs and pension will make farming an attractive career of choice; and not the last resort.
* The government must usher in kisan-dhan.  

A robust rural ecosystem would kick in a virtuous cycle of consumption, income and equitable growth. Rural development diminishes poverty three times faster.

This alone will achieve a rural growth of 12 per cent.  

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Tags assigned to this article:

Dr. Vikas Singh

The author is a senior economist, columnist, author and a votary of inclusive development

More From The Author >>

Top themes and market attention on: