Doubling of farmers’ income: Time to swing into action – Here is why

Increasing farm productivity alone will not help raise farmers’ income and may even be detrimental. the need is to diversify farmers’ sources of income.

Doubling of farmers’ income: Time to swing into action – Here is why
It is possible to argue that the government has a number of on-going schemes for agriculture, and they are adequate to achieve this goal. (Reuters)

One of the most important statements made in recent times by the government was the declaration of its intention to double farmers’ income by 2022. The statement of prime minister Narendra Modi in Bareilly on February 28, 2016, must have made the farmers leap with joy; news they must have longed to hear for a long time!

This declaration of intent was reiterated by the finance minister in his budget speech on February 29, 2016, and reinforced in every budget speech thereafter.

Unfortunately, the defining image of 2018 remains the blistered foot of a farmer from Nashik!

What went wrong?

The announcement about doubling farmers’ income was made in February 2016. Debates stared thereafter whether it is ‘real’ or ‘nominal’ income, and whether it will be done in five years or six years. It is not my intention to get into this debate. Knowledgeable people have written about this ad infinitum.

I would only argue that any step(s) taken to consistently increase the real incomes of farmers on a sustainable basis is a great decision. The whole nation needs to support this. Also, moving away from the typical concerns of productivity and food security, and placing farmer’s prosperity at the centre of the development agenda is a bold step long overdue. Congratulations to the government on this great leap of faith.

Hopes were re-kindled when the PM outlined a seven-point strategy to achieve this vision. The NITI Aayog in a paper in March 2017 outlined specific steps. Briefly stated, these were: increase in productivity of crops, increase in production of livestock, improvements in efficiency of input use, increase in crop intensity, diversification towards high value crops, improved price realisations to farmers, and shift of cultivators to non-farm jobs. All of these were good ideas, which could have made a difference. The NITI paper also argued that the biggest impact on farm incomes will come from better realisation of prices, i.e., market reform.

A committee was formed (in April 2016) under the chairmanship of Ashok Dalwai, a dedicated and distinguished bureaucrat, to write a report on how to double farmers’ income. The committee, assisted by well-known and well-meaning experts, has produced a series of excellent reports on the subject. Last heard of, the final recommendations are yet to be made. Expert seminars on the subject have been held by every institution concerned and have made contributions to the literature: yes the literature and not to farmers’ income!

The recent development on the subject was a consultation meeting with farmers and experts in February 2018, where the PM reiterated his commitment to double farmers’ income by 2022, and outlined a strategy consisting of four steps—reduce cost of inputs, ensure remunerative prices, reduce wastage at the farm level, and create alternate sources of income. An excellent strategy, no doubt!

The problem is not in the thinking, it is in the action!

The Dalwai committee is still in the process of finalising its report. Let us hope that the report comes out in the next few months. Going by the current reading of the chapters available, the report will be comprehensive, and will have many valuable suggestions, probably too many of them!

The report will, as per practice, be processed in Krishi Bhavan and the government approval will be sought. No problem there, except the process time and the financial outlays. By the time this is done, the financial year may almost be over. So three years lost! That leaves three years from April 2019, even if the schemes are rolled out during the second half of this financial year! Does that leave enough time for state governments to re-jig their budgets, given the 60:40 funding in all the schemes?

It is possible to argue that the government has a number of on-going schemes for agriculture, and they are adequate to achieve this goal. Yes, there have been new schemes like insurance, soil health cards, e-NAM, emphasis on irrigation, water conservation, etc. If these were adequate, what was the need for a committee to spend more than two years on finalising a report?

Let us understand clearly that the idea is to raise the income of the farmer. It need not come from productivity increases alone; in fact, focusing too much on increase in production can be detrimental to farmers’ prices, as is being witnessed now. The focus should be to look at what each farmer can do: add dairy, fisheries, poultry, horticulture or skill-based earning to his portfolio, depending on the farmer and the geography.

Taking a cue from the NITI Aayog paper , action could have been initiated on few points in April 2017 itself, primarily with reference to the market.

Can something start even at this late hour? Maybe yes. To begin with:

* Make doubling farmer’s income the central theme of all schemes, programmes and institutions of the agriculture ministry

* Rewrite the mandate of the Indian Council for Agricultural Research (ICAR) and all associated institutions, including the State Agricultural

Universities (SAUs) to focus research on “increasing net farm returns of farmers”

* Make Krishi Vigyan Kendras (KVKs) responsible for providing technical assistance to farmers to continuously increase their income.

* Merge most of the schemes of the agriculture ministry into one Rashtriya Krishi Vikas Yojana- (RKVY) type scheme (technically RKVY still exists) and ask district plans to be made clearly focused on farmers’ incomes.

* Act immediately on the market. e-National Agriculture Market(e-NAM) is at best a poster boy! It has not delivered for most of the farmers. Address information asymmetry and the weaknesses in marketing infrastructure, particularly in procurement. What use is a debate on whether the 50% increase is over A2+FL or C2 when the farmers are forced to sell at prices far below current MSP?

* Take a close look at the existing schemes and provide for innovation and convergence to achieve the single desired objective of increasing farmers’ income.

* When the ‘final’ report finally comes, we can make course corrections!

The target of doubling farmers’income is a daunting task. I would argue that if we start now and cross even the two-thirds of the mark by 2022, we would have given something to our farmers. Let us not lose further time. While the debates continue, let those responsible for implementation roll up their sleeves and get cracking! Let “good” begin, the best can follow!

By T Nanda kumar, Former secretary, agriculture & food ministries and currently visiting fellow at ICRIER.

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