Goal of doubling farmers’ income still elusive

Manjit S. Kang

OF all enterprises, agriculture affects every human being: no food, no life! Jawaharlal Nehru said at the time of Independence, “Everything else can wait but not agriculture.” Farmers are rightly referred to as annadata. Thus, agriculture should receive the highest priority. This should be particularly true in India, as the livelihoods of more than half of the country’s population depend, directly or indirectly, on agriculture. Agriculture also supports allied industries by providing raw material.

Farmers’ income can be enhanced by incentivising them to diversify away from the rice-wheat monoculture toward high-value crops; improving the accuracy of weather predictions; providing them with ‘weather-based crop insurance’ (extreme temperature, flooding, drought, hailstorm); and enhancing their capacity to form cooperatives, such as Farmer Producer Organisations. There is a need to set up ‘sustainable agriculture centres’ at key state agri universities.

There are not many positive aspects in the 2022-23 Budget as far as agriculture is concerned. The overall allocation for agriculture is up by less than 5% (Rs 1.33 lakh crore against Rs 1.27 lakh crore in 2021-22). The outlay for strengthening agricultural infrastructure has been increased to Rs 500 crore from Rs 200 crore in 2021-22. However, this was only 56% of the allocation for agricultural infrastructure in 2020-21.

The allocation for the Rashtriya Krishi Vikas Yojana (RKVY) saw an increase of about 18%: Rs 10,433 crore against Rs 8,852 crore in 2021-22. Some of the projects that the RKVY could strengthen are: ‘More crop per drop’ (water-use efficiency); Parampragat Krishi Vikas Yojana (PKVY; natural farming in North-East India); soil health/fertility; rainfed area development and climate change; agricultural mechanisation and management of crop residue.

The government will make it mandatory for thermal power plants to use biomass pellets as 5% to 7% of their fuel mix (with coal) to generate electricity. This practice should reduce air pollution and possibly give farmers extra income.

The PM-KISAN programme saw a 0.74% increase in allocation — Rs 68,000 crore against Rs 67,500 crore in the previous year.

Some important programmes that saw reduction in allocation in the 2022-23 Budget are:

(a) Pradhan Mantri Bima Yojana (Crop insurance): Rs 15,500 crore against Rs 15,990 crore in 2021-22.

(b) Minimum Support Price (MSP): Rs 2.37 lakh crore in direct procurement payments compared to Rs 2.48 lakh crore in 2021-22. The Finance Minister said 1.63 crore farmers benefited from the procurement of 12.1 crore tonnes of paddy and wheat at MSP in 2021-22 compared with 1.97 farmers (12.9 crore tonnes of paddy and wheat procured) in 2020-21.

(c) Related to MSP-based procurement of pulses and oilseeds, Market Intervention Scheme-Price Support Scheme got a reduced allocation: Rs 1,500 crore vs Rs 3,960 crore in the revised estimate for 2021-22. In addition, the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan received only Rs 1 crore compared with Rs 400 crore in 2021-22.

(d) Food and nutritional security: Rs 1,395 crore against Rs 1,540 crore in 2021-22.

(e) Other than encouraging organic farming in the North-East region (Rs 198 crore allocated), there is no allocation for PKVY, even though PM Modi had urged in December 2021 that natural farming be promoted.

(g) Fertiliser subsidy has been reduced. Urea subsidy is down by 17% and N-P-K fertiliser subsidy has been reduced by 35% compared with the revised estimates for 2021-22.

Some oddities in the Budget speech were noted. For example, states and union territories will be asked to revise the syllabi of state agricultural universities (SAUs) to emphasise organic farming, value addition, ‘Zero-budget natural farming’, etc. Organic farming cannot be popularised in the country by simply changing the curricula of the SAUs. It is the farmers who need incentives to adopt organic farming. According to a 2019 survey, India’s area under organic farming was only 36.7 lakh hectares (5.1% of the total global area under organic farming). Small gains are possible, but this situation is not expected to change substantially even after five years. Farmers will have to be compensated for reduced productivity from organic farming, at least in the initial years.

The Finance Minister did not address the issue of ‘Doubling Farmers’ Income’ (DFI) by 2022. The Committee on DFI had produced 14 volumes totalling 3,156 single-spaced pages full of bureaucratic jargon. The committee listed five points as essential ‘pillars’ for doubling farmers’ income and sustaining a steady income growth in the long run: Increasing productivity as a route to higher production; reduced cost of production/cultivation; optimal monetisation of the produce; sustainable production technology; risk negotiation all along the agricultural value chain.

The committee had also proposed to develop a National Farmers’ Database partly to double farmers’ income. However, according to a survey conducted by the National Sample Survey Office, between July 2017 and June 2018, just 4.4% rural households had a computer against 14.4% in an urban area. Only 14.9% rural households had access to the Internet against 42% households in urban areas. The committee failed to recognise this fact. No wonder the goal of doubling farmers’ income remains elusive. The fact is that in 2015-16, when the idea of doubling farmers’ income was conceived, the base income per household was about Rs 8,060 per month. That income, after accounting for inflation, should have been Rs 21,150 per month in 2022, which is not the case.

Farmers’ income can be enhanced by: Incentivising them to diversify away from the rice-wheat monoculture toward high-value crops; improving the accuracy of weather predictions; providing them with ‘weather-based crop insurance’ (extreme temperature, flooding, drought, hailstorm); enhancing their capacity to form cooperatives, such as Farmer Producer Organisations (FPOs).

If organic farming and conservation agriculture are to be promoted, underground water depletion is to be arrested, environment is to be preserved, and climate-resilient, highly productive crop varieties are to be developed, ‘sustainable agriculture centres’ should be established at key SAUs.

While preparing the annual Budget, the government should consult heads of SAUs by inviting them to a pre-Budget meeting. Farmers’ representatives and progressive farmers should be consulted too because, after all, farmers are the ones who know the ground realities. They are the ones who have brought India out of severe food deficiency to make it a food-secure nation.

Major announcements

Procurement of wheat in Rabi 2021-22 and the estimated procurement of paddy in Kharif 2021-22 will cover 1,208 lakh metric tonnes of wheat and paddy from 163 lakh farmers, and Rs2.37 lakh crore direct payment of MSP value to their accounts.

Chemical-free natural farming will be promoted throughout the country, with a focus on farmers’ lands in 5-km-wide corridors along the Ganga, at the first stage.

With 2023 being the International Year of Millets, support will be provided for post-harvest value addition, enhancing domestic consumption, and for branding millet products nationally and internationally.

To reduce dependence on import of oilseeds, a rationalised and comprehensive scheme to increase domestic production of oilseeds will be implemented.

For delivery of digital and hi-tech services to farmers with the involvement of public sector research and extension institutions along with private agri-tech players and stakeholders of agri-value chain, a scheme in the PPP mode will be launched.

A fund with blended capital, raised under the co-investment model, will be facilitated through NABARD. This is to finance startups for agriculture & rural enterprise, relevant for farm produce value chain.

States to be encouraged to revise the syllabi of agricultural universities to meet the needs of natural, zero-budget and organic farming, modern-day agriculture, value addition and management.

Use of Kisan drones will be promoted for crop assessment, digitisation of land records, spraying of insecticides, and nutrients.

The author is former V-C, PAU, Ludhiana

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