Experts cite steps needed for doubling farmer income by FY23

The agriculture and allied sectors GVA is estimated to grow at 3.7% in FY20. The growth was 0.6% in FY16 while it was 6.8% in FY17.

Experts cite steps needed for doubling farmer income by FY23

Long-term future of Indian farmers depends on getting large segments of people out of farming and addressing the issue of small and fragmented landholdings that limit farmer incomes, according to experts.

“Relentless population pressures have meant that most Indian farms are too small to provide viable incomes. It needs to be recognised that growth and employment opportunities outside agriculture are critical for long-term improvements in farmers’ incomes,” noted economists Ashok Gulati, Devesh Kapoor and Marshall M Bouton jaid in a joint research report published in the Economic and Political Weekly. They have also suggested reforms in four areas – focus on farmers’ livelihoods, land and water efficiency, weather and price risks and agri markets – to achieve the goal of doubling farmer income.

According to the report of the committee on doubling farmers’ income, headed by Ashok Dalwai, the average monthly income of a farmer family in 2015-16 was Rs 8,059, whereas the mandate is to increase it to Rs 16,118 by 2022-23. The report observed that agriculture needs to grow at 10.4% per annum until 2022-23 in real terms (after discounting for inflation) to achieve the goal.

The agriculture and allied sectors GVA is estimated to grow at 3.7% in FY20. The growth was 0.6% in FY16 while it was 6.8% in FY17.

Since agriculture contributes only 15% to the nation’s GVA, the average income of farmers in India is about one-sixth of that of non-agriculturists, and the real income of farmers had declined, according to RB Singh, former president of the National Academy of Agricultural Sciences. He said parity in pay among women and men for equal job done alone would enhance agricultural production and income by about 30%.

Gulati and his co-authors have suggested freeing up input prices to market levels, or charge at least full-cost pricing for fertilisers, power, agri-credit and canal waters fees; and earmark the resulting savings for investment in agricultural R&D, irrigation, marketing infrastructure, building value chains by involving farmer producer organisations (FPOs) and linking farms to organised retail, food processing and export markets.

They have also favoured continuation of direct income transfers to farmers’ accounts under the PM-Kisan scheme.

Further, the report has suggested creation of a more permanent agri-reforms council on the lines of the GST Council so that the Centre and states work closely in a spirit of ‘cooperative federalism’ if the recommended reforms are to succeed. The Centre will continue to have a larger role even though agriculture is a state subject, they said.

“The focus for the central government will need to be two-fold – first, actions that it can unilaterally raise agricultural incomes, and second, actions to influence state governments to improve agriculture,” the report said. Many of the important levers — water, power, irrigation, extension, etc — are controlled by the states and those are the critical areas to boost farm growth.

“While the fate of agriculture will still largely be determined by the states and state-level politics, the Centre can nonetheless initiate immediate actions, many of which are politically not difficult,” Gulati said.

Stressing that subsidising the poor (or rich) consumer is not the responsibility of the farmer, the authors have said unless farm policies put the producers’ interests on top, little will change in practice.

While agri exports more than doubled, from $18.4 billion in FY10 to $43.6 billion in FY14, they dropped to $33.3 billion in FY16 and recovered only to $39.4 billion in FY19.

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First published on: 19-03-2020 at 00:10 IST