Doubling of farmers’ income has been achieved in some states including Andhra Pradesh and Madhya Pradesh and the feat could have been achieved nationally too had the three farm reforms not rolled back, Niti Aayog Member Ramesh Chand told FE.
He said that with good monsoon and a rise in farm product prices, the agriculture growth will likely exceed 5% in FY25 compared with 1.4% in FY24.
“In large number of states, we were very close to achieving the goal of doubling farmers’ income. Whatever positive impact was contemplated on the net price received by farmers as a result of the three farm laws, did not happen. If that had happened, then that goal would have been achieved,” Chand said. AP and MP could achieve it for their farmers as they followed some of aspects of the three reforms.
According to the doubling farmers’ income (DFI) roadmap, an average farmer’s agri-based income was to double from Rs 58,246 in 2015-16 prices to Rs 1,16,165 (constant prices) by the 2022-23 agriculture year ending June 2023. Including non-farm income, the average annual income of the farmer at the national level in 2015-16 was taken as Rs 96,703 by extrapolating the 2012-13 NSSO estimates. The targeted farmers’ income (farm and non-farm) at the national level was targeted to be Rs 172,694 in 2022-23.
Due to prolonged protests by the farmers, the Centre in November 2021 had rolled back three new acts for farm sector reforms — the Farmers’ Produce Trade And Commerce (Promotion and Facilitation) Act, the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act and the amendment to the Essential Commodities Act.
These legislations were aimed at allowing barrier-free inter-state and intra-state trade and commerce outside physical premises of markets notified under State APMC legislation, contract farming through an agreement between a farmer and a buyer before the production and empowering the Centre to regulate the supply of certain food items such as cereals, pulses, and onions including imposition of stock limits only under extraordinary circumstances such as war and famine.
“We were very close to achieving the doubling of income nationally as our production has been growing at a historically highest rate of 5% for seven years and terms of trade for agriculture improved with real prices rising,” he said.
Gross Value Added (GVA) for agriculture and allied activities in FY24 grew at just 1.4% in constant terms, the slowest since 2018-19. It was 4.7% in FY23. This was primarily because of below-normal monsoon rainfall in 2023, which was expected to have curtailed the output of several key crops. The average farm sector growth was 5% over seven years before FY24.
Besides positive base impact, three factors would aid agriculture growth in FY25, he said. These are: good monsoon with La Nina effect in August, favourable terms of trade for agriculture due to high food inflation and the Center as well as states giving a push to growth in the sector through various initiatives.
Monsoon rains till Wednesday were 4.9% above the benchmark – long period average or at the ‘above normal’ range.
With rice stocks at a high and new harvest from Punjab to arrive from September-end, Chand said the rice export ban may need to be lifted to list market prices to ensure private players procure from the market at above minimum support prices (MSP). Since the government could not export foodgrains procured for food security as per the WTO norms, it could also be released through the open market sales scheme (OMSS) if market prices improve.
“So, if exports happen, it will have some positive impact on market prices, then the possibility of sale happening under OMSS improves,” he added.