Need to address key challenges in farm sector for doubling farmers’ income, says Economic Survey

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New Delhi | January 31, 2020 3:27 PM

Economic Survey 2020: As the proportion of small and marginal holdings is significantly large, land reform measures like freeing up land markets can help farmers improve their income.

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Economic Survey 2020: To achieve the target of doubling farmers’ income by 2022, the Economic Survey on Friday said there is an urgent need to address some of the basic challenges like credit, insurance coverage and irrigation facilities in the agriculture and its allied sectors. There is also a need to reallocate labour resources to other sectors, give increased focus on exploring global markets for agricultural commodities besides supplementing efforts of farmers with direct income support, it said. “The realisation of the objective of doubling farmers’ income necessitates addressal of some of the basic challenges of agriculture and allied sector,” according to the Economic Survey 2019-20 tabled in Parliament.

Issues such as investment in agriculture, water conservation, improved yields through better farming practices, access to market, availability of institutional credit, increasing the linkages between agricultural and non-agricultural sectors need urgent attention, it said. According to the Survey, the coverage of irrigation facilities needs to be extended while ensuring an effective water conservation mechanism. An inclusive approach to provision for agricultural credit has to be undertaken to address the issue of skewness in its regional distribution, it said.

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As the proportion of small and marginal holdings is significantly large, land reform measures like freeing up land markets can help farmers improve their income. The Survey further said allied sectors, such as animal husbandry, dairying and fisheries, need to be given a boost to provide an assured secondary source of employment and income, especially for small and marginal farmers.

Given the fact that the livestock sector has grown at a compound annual growth rate of nearly 8 per cent over the past five years, it assumes an important role in income, employment and nutritional security, it said. “Livestock income has become an important secondary source of income for millions of rural families and has assumed as important role in achieving the goal of doubling farmers’ income,” the Survey added.

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Noting that farm mechanisation helps the Indian farming transform into commercial from subsistence farming, the Survey said there is also a need to address the issue of lower farm mechanisation in India which is only about 40 per cent as compared to about 60 per cent in China and around 75 per cent in Brazil. As a well-developed food processing sector ensures better return to the farmers and promotes employment, the Survey said “more focussed attention” is required to be given to the sector to its significant role in reducing post-harvest losses and creation of additional market for farm outputs.

The food processing sector is growing at an average annual growth rate of more than 5 per cent over the last six years ended 2017-18, it added. While government measures are in operation aimed at improving productivity and its marketing, efforts of farmers need to be supplemented with better coverage of direct income or investment support.

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“There is a need to give increased focus on exploring global markets for agricultural commodities to give an additional source of market for the surplus of agricultural produce India currently has,” the Survey noted. There is also a need to reallocate labour resources to other sectors. Though the structural transformations involved a falling share of the agriculture sector and rising share of services sector jobs, more needs to be done to create manufacturing jobs to absorb the large pool of workers, it said.

Stating that agriculture and its allied sectors still remain an important sector, the Survey said it is because of its continued role in employment, income and most importantly in national food security. Their contribution to national income has gradually declined from 18.2 per cent in 2014-15 to 16.5 per cent in 2019-20, reflecting the development process and the structural transformation taking place in the economy.

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