Why doubling farmers’ income still remains a dream

In 2016, the Prime Minister had said farmers’ income would double by 2022. How far is the nation from the target?

Even though the government has not provided any concrete data on farmers’ income, the data available on various schemes for farmers providesome insights into its current status.

The latest estimate of the income of agricultural households is based on the Situation Assessment Survey of Agricultural Households, conducted by the National Sample Survey Office (NSSO) during the 77th round (January-December 2019).

Income rose from wages

As per survey, the average monthly income per agricultural household, from all sources, was estimated at ₹10,218 when compared with ₹6,426 in 2012-13. In other words, farm income had risen by 59 per cent till 2019.

But, in this period, their earnings came more from wages than from the crop production in 2018-19. While MSPs have increased and the Centre is spending on farm mechanisation, insurance, etc., the lack of awareness is a hurdle in bringing schemes to farmers.

Farmers’ earnings

In 2012-13 (during the 70th NSS round), the average monthly income of agricultural households was ₹6,426, of which ₹2,071 came from wages, ₹3,081 came from crop production and cultivation, ₹763 from farming of animals, and ₹512 from a non-farm business.

The 77th NSS round data, in 2018-19, showed that the average monthly income has gone up to ₹10,218, of which the highest income comes from wages (₹4,063), followed by income from crop cultivation and production (₹3,798). There is also a substantial rise in income from animal farming (₹1,582 from ₹763). Farmers are also earning comparatively higher income from non-farm businesses and leasing out land.

However, farmers say that cultivation costs have almost doubled while their income is not commensurate with the rising inflation. Income from wages was 32 per cent in 2012-13. It was recorded to be 40 per cent in 2018-19. This implies that farmers are turning into daily wage labourers.

Production and income

The Ministry of Agriculture told the Lok Sabha in April this year that in 2013-14, the budget allocation for the Department of Agriculture was ₹21,933.50 crore. This increased by more than 5.5 times to ₹1,23,017.57 crore in 2021-22.

Foodgrain production increased to the highest ever from 265.05 million tonnes (mt) in 2013-14 to 305.43 mt in 2020-21 (third advance estimate). Horticulture production has increased from 280.99 mt in 2014-15 to 320.48 mt in 2020-21 (second advance estimate), the highest ever for the horticulture sector.

However, the NITI Ayog report on Doubling Farmers’ Income by Ramesh Chand (2017) states that in some cases, growth in output increased farmers’ income, but in many cases, farmers’ income did not increase significantly with the increase in output.

Benefit from schemes

The Government had increased the minimum support price (MSP) for all the mandated kharif, rabi, and other commercial crops with a return of at least 50 per cent on the overall India-weighted average cost of production from 2018-19. The MSP for paddy was increased to ₹1,940 per quintal in 2021-22, from ₹1,310 per quintal in 2013-14, marking an increase of 48 per cent. The MSP for wheat was increased from ₹1,400 per quintal in 2013-14 to ₹2,015 per quintal in 2021-22.

Farmers who protested on Delhi’s borders against farm reform laws had demanded a law for guaranteed MSP.  The NSS 77th round shows that the percentage of output sold by households under the MSP ranges between 0 to 24.7 per cent (except sugarcane). Paddy and wheat-growing households dominate the charts of MSP awareness and output sold under it. With over 14 per cent of 14.6 crore landholding farmers (2015-16) getting benefits from the MSP, most farmers are out of the MSP net and continue to sell their produce below MSP.

The government launched the PM-KISAN in 2019 to provide ₹6,000 per year in three equal installments, with a total of ₹1.8-lakh crore released to over 11.7 crore farmer families.

This benefit does not necessarily go into the capital expenditure in farming, as small and marginal farmers still struggle to fulfill their basic needs, such as their children’s education and health expenses.

Insurance, credit and infra

About 29.29 crore farmer applicants enrolled themselves under the Pradhan Mantri Fasal Bima Yojana (PMFBY), launched in 2016. Over 8.99 crore (provisional) farmer applicants have received claims of over ₹1,03,903 crore.

During this period, farmers paid nearly ₹21,448 crore as premium, against which claims of over ₹1,03,903 crore (provisional) were disbursed For every ₹100 of premium paid by farmers, they have received ₹484 as claims. Yet, many States such as Maharashtra, are now opting out of the scheme saying that farmers are unhappy with claim settlements.

Institutional credit for the agriculture sector increased from ₹7.3-lakh crore in 2013-14, with a target to reach ₹16.5-lakh crore in 2021-22.

For agricultural mechanisation, from 2014-15 to 2021-22 (as of December 31, 2021), ₹5,130.61 crore has been allocated. On subsidy, about 13.78 lakh machines and equipments were provided to them. About 16,007 custom hiring centres, 378 high-tech hubs, and 16,064 farm machinery banks have been established. However, farm mechanisation is posing a major threat to agricultural labourers.

Under the Agriculture Infrastructure Fund, the government had mobilised ₹7,700 crore for more than 7,300 projects, but experts insist on need for more investment in infrastructure from the government and the private sector.

Need for policy

Farmers say that government schemes will not help them double their income unless government policies on agriculture are comprehensive, grant freedom of technology and market, and infuse more money into infrastructure development.

Apex farmers’ organisations such as the Shetkari Sanghatana in Maharashtra say that ad hoc policies and schemes will not help farmers as long as government intervene in the market to control prices to keep the consumers happy at the cost of farmers.

Source : The Hindu Busines Line 16th May 2022