Enable agriculture to be future-ready
The contradiction is clear. While in my understanding, the road to achieving the Prime Minister’s vision of Atmanirbhar Bharat passes through agriculture, the new road map for the country for the next 25 years — the Amrit Kaal — to coincide with 100 years of India’s Independence, appears to have been drawn sidelining agriculture.
Presenting the Budget in 2020, Finance Minister Nirmala Sitharaman had presented a 16-point action plan for rebuilding agriculture. While reiterating the government’s commitment of doubling farmers’ income, the thrust of her speech was on liberalising farm markets, land leasing laws and contract farming, essentially paving the way for corporate agriculture. A few months later, the budget pronouncements on market reforms in agriculture were followed with the introduction of the three contentious farm laws that brought hundreds of thousands of farmers protesting at the doorsteps of Delhi. The year-long farmers’ stir finally forced the government to roll back the laws.
The unprecedented protests by the farmers coincided with the period when the outbreak of Covid-19 was at its worst, and with strict lockdown restrictions, had forced the economy to shrink by 6.6 per cent in 2020-21. During this depressing stage, agriculture and allied sectors alone had shown resilience, emerging as the brightest star. As per this year’s Economic Survey, agriculture registered a growth rate of 3.6 per cent in 2020-21. Subsequently, during the period the second wave of the pandemic was at its devastating worst, followed by a relatively mild third wave, agriculture and allied sectors still showed an impressive performance, achieving a higher growth rate of 3.9 per cent in 2021-22.
While agriculture, which employs the largest workforce, accounted for 18.8 per cent of the Gross Value Added (GVA) of the country, the Economic Survey found its performance to be in conformity with the recommendations of the committee on doubling farmers’ income.
Considering that 2022 is the target year for doubling farmers’ income and more over, given the extraordinary performance of agriculture at times when the chips were largely down, the Finance Minister was expected to announce in the Budget 2022 a slew of measures to not only act as a booster dose for agriculture, but also as a pat on the back for the hardworking farmers. But strangely, even the overhyped promise of doubling farmers’ income did not find a mention. I was expecting Sitharaman to tell us how far the target has been achieved or how much more time is required to take us to the goal.
Nobel laureate Norman Borlaug had once said that we need to buck up the one, who is running the fastest. With agriculture performing so well, the expectation was to at least double the direct income support entitlements under the PM-Kisan Samman Nidhi scheme. This could have been the easiest way to compensate as well as to thank the farmers. At present, ever since the scheme was launched in 2018, land owning farmers receive a sum of Rs 6,000 per year. This could have been easily doubled to Rs 12,000 per year, with an additional Rs 6,000 per year allocated for the landless farmers who were earlier left out from the list of beneficiaries. While the budget for the PM Kisan scheme has been kept more or less the same at Rs 68,000 crore, an additional budget of Rs 1 lakh crore for direct income support could have been easily pulled out given the increased revenue collections.
The latest report of the Situation Assessment Survey for Agricultural Households, 2019 (pertains to a period before the lockdown) pointing to an average farm income of Rs 10,286 (including income from non-farm activities) per month. Further, let me reiterate that if the total farm income is broken up and evaluated in terms of what a farmer earns from crop cultivation alone, it comes to a paltry Rs 27 per day. The reason for the acute distress that prevails on the farm therefore is quite obvious. It has more to do with the farm gate prices being deliberately kept low rather than blame it on low crop productivity. Give farmers an assured price, and be sure he knows which technology to use on his farm.
Take the case of mustard. With market prices ruling much higher, touching Rs 7,000 per quintal against the MSP of Rs 4,650 that was offered in the marketing season last year (Rs 5,050 per quintal is the MSP this year), mustard has already been sown in an area of 9.1 million hectares this rabi season. Interestingly, the acreage under mustard this year has already surpassed the Ministry of Agriculture’s own target that it had set for 2025-26. And let’s be clear that the record production in mustard this year has been achieved without the application of any hi-tech and digital infrastructure.
There are important lessons here. It only goes to show that a rightful price is the best incentive that a farmer requires. But farm prices are deliberately kept low to ensure food inflation is within control. That means it is the farmer who actually bears the burden of keeping food prices low, and they need to be compensated for the loss they suffer as a consequence. That is why the need to ensure that farm gate prices does not fall below the MSP for any crop. Budget 2022 is quiet on this.
The best way to make agriculture globally competitive is to make farming economically viable, and that can be only possible if the roadmap for the next 25 years is based on strengthening the existing agricultural marketing infrastructure, and by ensuring fair prices to farmers. Technology is certainly welcome, including drones, as well as the next-generation digital technologies, but the future of Indian agriculture, the largest employer in the country, hinges on enhanced public investments and right public policies for the vast human capital in agriculture, and not by ushering in corporate agriculture.
Instead of pushing people out of agriculture, as some economists are suggesting, the big-ticket reform for the Amrit Kaal should be to strengthen farming and agriculture.
