Three years of Narendra Modi government: Agriculture is posting just 1.7 percent average growth

The sector is limping, posting just 1.7% annual average growth so far in the term of the Modi government.

Three years of Narendra Modi government: Agriculture is posting just 1.7 percent average growth
Agriculture is still limping with just 1.7% annual average growth during the term so far of the Modi government, and most of the farmers are struggling for survival.

With the Narendra Modi-led government completing three years in office, it is high time to assess its performance in various sectors. We focus here on agriculture. Without robust growth of agriculture, “sabka saath, sabka vikas” will remain an empty slogan.

There are two ways to evaluate the Modi sarkar’s performance in agriculture. One way is to evaluate its flagship programmes related to agriculture and see how they have impacted Indian agriculture. The other is to go back to the Election Manifesto of the BJP for 2014, and see how many of those promises have been fulfilled. We did an evaluation of NDA-II’s flagship agriculture programmes, especially Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), Pradhan Mantri Fasal Bima Yojana (PMFBY) and e-National Agriculture Market (e-NAM), in our earlier piece in this newspaper (‘The right policy mix, but implementation poor’, April 24, In brief, the conclusion was that they are all steps in the right direction, but so far their impact has not been felt, and perhaps it will not be before 2019 that any tangible results at large scale are visible.

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Here, in this piece, we look at the major promises made in the election manifesto, and how far Modi government has progressed in turning those promises into reality. The BJP manifesto had stated, “Agriculture is the engine of India’s economic growth and the largest employer, and BJP commits highest priority to agricultural growth, increase in farmers income and rural development. BJP will:

Increase public investment in agriculture and rural development,

Take steps to enhance the profitability in agriculture, by ensuring a minimum of 50% profits over the cost of production, cheaper agriculture inputs and credit, introducing latest technologies for farming and high-yielding seeds, and linking MGNREGA to agriculture. There were some other promises too in terms of bringing down food inflation, creating a price stabilisation fund, and reforming the food management system by unbundling FCI into three parts, dissemination of real-time data to farmers on production and prices, etc, and setting up a National Agriculture Market. It also promised that the government will introduce crop planning based on soil assessment and that mobile soil-testing labs will be set up.

On completion of three years of the government, we find that, while a number of steps have been taken to realise promises made in the manifesto, there are several important promises which have fallen by the wayside. There is hardly any talk now of ensuring 50% profit to farmers; instead, we are now grappling with the new promise of doubling farmers income in 5 years. The reforms in the food management sector have been almost forgotten, and there has been hardly any initiative to try DBT for food subsidy on a large scale, despite the recommendation of the high level committee under former agriculture minister Shanta Kumar.

The price stabilisation fund, which started with a corpus of `500 crore to tackle the high prices of onions, has enlarged to more than `3,500 crore, building buffer stock of pulses to the tune of almost 2 million tonnes. Given the short shelf-life of pulses, the challenge now is to continuously rotate this stock for stabilising pulse prices. Since most states are reluctant to distribute pulses under PDS, the procuring agencies will have to sell pulses in the open market or give to large organisations like the armed forces, etc. A transparent disposal mechanism is critical to ensure that the officers are not harassed later for any losses incurred. So far, just 1.2 lakh tonnes of pulses have been sold from the buffer stock. We understand that even the quantity procured/imported in FY16 is yet to be disposed of. That is worrying as quality will deteriorate fast.

Another major initiative of the government was issuing soil health cards to all farmers once in two years. Building from the experience of Gujarat, the idea was that farmers will make good use of information on soil health and the application of fertilisers will be in accordance with the need of soil. A target of 14 crore cards was fixed against which 6 crore cards have been distributed so far. Most states have shown only lukewarm response to the scheme—as a result, the expected benefits of application of appropriate doses of fertiliser have not accrued. UP, Punjab, Haryana, Rajasthan and Bihar have shown poor performance in testing soil samples. There are indications that a major change in the procedure for disbursement of fertiliser subsidy is likely from July 2017, and fertiliser companies will be paid the subsidy amount only when the dealer has actually sold the fertiliser. We do not think the scheme will take into account the health of soil and actual need of nutrients while reimbursing the companies. A better way would have been to directly transfer the fertiliser subsidy to farmers’ accounts and free up fertiliser prices, as was recommended by the Shanta Kumar panel. That would have automatically encouraged farmers to use information available via the soil health cards.

And finally, a word about doubling of farmers’ income, announced by the prime minister in a public meeting at Bareilly in UP on February 28, 2016. The PM said, “From this land of Uttar Pradesh, I urge all the states to give priority to agriculture and then see the changes. The roadmap is there, you only have to implement it.” Since then, the bureaucracy and NITI Aayog have been busy justifying how doubling of farmers’ incomes in five years can be achieved, without even officially spelling out whether it is real income or nominal that one is talking about. But more on this in another column! For the time being, this slogan is just shifting the goal post of 50% profits over cost.

Overall, agriculture is still limping with just 1.7% annual average growth during the term so far of the Modi government, and most of the farmers are struggling for survival.

-By Ashok Gulati & Siraj Hussain

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