DOUBLING FARMER'S INCOME – AGRICULTURE

News: Modi government promised to double farm income by 2022 but it has only come down: Congress

 

What's in the news?

       Targeting the Narendra Modi government over its promise to double farmers’ income by 2022, the Congress on December 29 said the Manmohan Singh-led UPA government had actually raised farm incomes between 2004 and 2014.

       The party also demanded a White Paper from the Modi government for not fulfilling its promise to double farm incomes.

 

Causes of Farmers Distress in India:

1. Low agriculture income:

       The ‘Situation Assessment Survey of Agricultural Households' conducted by the National Sample Survey Office (NSSO-SAS) of Ministry of Statistics and Programme Implementation (MOSPI) suggests that average income of an agricultural household was much below the income of the non-agricultural household.

2. Poor Policy and Planning:

       In the past, Government strategy primarily focused on raising agricultural output and improving food security rather than recognising the need to raise farmer’s income,

       The absence of direct measures to promote farmers’ welfare is also one of the main reasons for agricultural distress.

3. Low price realization:

       There is a large gap between what the farmers get for their produce and the prices that the final consumer pays for the same.

4. Issues with MSP:

       The issue of Minimum Support Prices (MSP) is a recurrent theme where we see the farmers seeking higher MSP from the government.

       Lately, the farmers have been demanding for raising the MSP to 50% of input costs as per Swaminathan committee recommendations.

       Regional disparity in getting the benefits of MSP by farmers is one of the important problems.

5. Bankruptcy or indebtedness:

       The high level of debt, especially from non-institutional sources (36% of the total credit) with high interest rates compel farmers for suicide.

6. Poor Market linkages:

       There is absence of a direct linkage between farm producers and consumers.

       The limited spatial spread of Agricultural Produce Market Committee (APMC) markets and high market charges of APMCs are also responsible for the low price realization by the farmers.

7. Post-harvest Losses: 

       A study conducted by Indian Council of Agricultural Research (ICAR) in 2010 shows that the post-harvest losses of various commodities range from 4%-18% for cereals, pulses, fruits and vegetables.

       The Ashok Dalwai report estimated losses worth 34% and 45% in fruits and vegetables respectively.

8. Dependence on Rainfall and Climate:

       Indian agriculture is heavily dependent on monsoon and ever-increasing global temperature has made agriculture more prone to extreme weather events.

       Out of about 141 million hectares of net area sown in the country, about 65 million hectare (or 45 percent) is presently covered under irrigation.

9. Lack of Mechanization:

       Introduction of the latest technology has been limited due to various reasons like accessibility for credit and low awareness.

10. Other reasons:

       Shortage of inputs like seeds and irrigation facilities.

       Climate change related issues that affect the agriculture produce.

 

Measures need to be taken:

1. Processing industries and cold storage facility:

       Today 90% farmers want processing units and cold storage facility in the villages, especially for vegetables and fruits.

       So that farmers will get proper marketing & rates. 

       Government should incentivize industry to open food processing units and cold storage facilities near villages.

2. Need for better water management:

       Currently available irrigation facilities do not cover the entire cultivable land.

       In most cases, it is not the lack of water but lack of proper water management that causes water shortage.

       Improved modern methods of rain water harvesting should be developed. Surplus water from perennial rivers can be diverted to the needy areas.

       Connecting the rivers throughout the country will solve this problem.

       Construction of national waterways will improve the irrigation facility, which in turn can save the farmers, if the monsoon fails.

       The water-use efficiency can be improved significantly with better use of technologies that include drip irrigation.

3. Developing alternate sources of income for farmers:

       The Government should take up the responsibility for providing training to the farmers to acquire new skills to reduce the dependence on agriculture.

       New areas like horticulture, aquaculture, fishery should also be promoted.

4. Sustainable farming methods:

       Organic farming is the way out for sustainable farming. 

       Precision farming helps to get out of drought adversities by targeted input delivery. It requires minimum input and also reduces cost of production.

5. Climate Resilience farming (CRF):

       It depends mostly on technological tools like smart weather forecasts using Big data analytics.

       Plant biotechnology by developing short duration varieties, submerged crop varieties for coastal regions, drought resistant varieties for arid areas can further promote CRF.

6. Need for Market Reforms:

       The creation of a competitive, stable and unified national market is needed for farmers to get better prices.

7. Develop village level procurement centers:

       Developing Gramin Agricultural Markets (GrAMs) will help develop the agricultural marketing infrastructure and bring markets closer to the farm-gate.

8. Promotion of Cooperative Farming:

       Consolidation of land holdings also becomes important to raise farmer incomes.

       Farmers can voluntarily come together and pool land to gain the benefits of size.

       Through consolidation, farmers can reap economies of scale both in input procurement and output marketing.

9. Development Initiatives:

       Initiatives including infrastructure, technological interventions, farmer friendly policies and institutional mechanisms can increase agricultural growth and farmers income.

10. Ashok Dalwai Committee:

       The Government had constituted an Inter-Ministerial Committee in April, 2016 to examine issues relating to ‘Doubling Farmers’ Income’ (DFI) under the leadership of Ashok Dalwai.

       The Committee had submitted its Report to the Government in September, 2018 containing the strategy for doubling farmer's income by the year 2022.

       The DFI strategy as recommended by the Committee include seven sources of income growth such as

       Improvement in crop productivity.

       Improvement in livestock productivity.

       Resource use efficiency or savings in the cost of production.

       Increase in the cropping intensity.

       Diversification towards high value crops.

       Improvement in real prices received by farmers.

       Shift from farm to non-farm occupations.

11. Implementation of the recommendations of National Commission of Farmers:

       Distribute ceiling-surplus and waste lands.

       A comprehensive set of reforms to enable farmers to have sustained and equitable access to water.

       Promotion of conservation farming, which will help farm families to conserve and improve soil health, water quantity and quality and biodiversity.

       Expand the outreach of the formal credit system to reach the really poor and needy.

       Restructure microfinance policies to serve as Livelihood Finance, i.e. credit coupled with support services in the areas of technology, management and markets.

12. Price Realization:

       Replace the Commission on Agricultural Costs & Prices (CACP) by an agriculture tribunal in line with the provisions of Article 323 B of the Constitution.

       Statutory status to the minimum support price system.

13. Establish regional production belts:

       As in the cluster-based approach, supported through the Mission on Integrated Development of Horticulture (MIDH).

       This will support the government's initiative of doubling the farmers income.

 

Huge R&D investment is required for development of smart and technological solutions to Agricultural problems of India. Advocating use of Drones and smart phones to assess crop failures in PM Fasal Bima yojana crop insurance scheme, e-NAM are few Policy initiatives. But there is huge scope for the government to solve farmers problems with technological solution.