Why doubling farmers’ income is still a dream
Even though the government has not provided any concrete data on the doubling of farmers’ income, the available data on various schemes for farmers provides some insights into its current status.
The latest estimate of the income of agricultural households is based on the Situation Assessment Survey of Agricultural Households, conducted by the National Sample Survey Office (NSSO) during the 77th round (January-December 2019).
As per the survey results, the average monthly income per agricultural household, from all sources, was estimated at ₹10,218 when compared to ₹6,426 in 2012-13. In other words, the farm income had risen by 59 per cent till 2019.
But, in this period, their earnings came more from wages than from the crop production in 2018-19. While the MSPs have increased and the Centre is spending on farm mechanisation, insurance, etc., the lack of awareness is a hurdle in making schemes reach farmers.
What are farmers’ earnings?
In 2012-13 (during the 70th NSS round), the average monthly income of agricultural households was ₹6,426, of which ₹2,071 came from wages, ₹3,081 came from crop production and cultivation, ₹763 from farming of animals, and ₹512 from a non-farm business.
The 77th NSS round data, in 2018-19, showed that the average monthly income has gone up to ₹10,218, of which the highest income comes from wages (₹4,063), followed by income from crop cultivation and production (₹3,798). There is a substantial rise in income from animal farming (₹1,582 from ₹763).
The farmers are also earning comparatively higher income from non-farm businesses and are leasing out land. However, the farmers say that the cultivation costs have almost doubled, and their income is not commensurate with the rising inflation. Income from wages was 32 per cent in 2012-13. It was recorded to be 40 per cent in 2018-19. This implies that farmers are turning into daily wage labourers.
A rise in production results in rising in income?
The Ministry of Agriculture told the Lok Sabha in April this year that in 2013-14, the budget allocation for the Department of Agriculture was ₹21,933.50 crore. This increased by more than 5.5 times to ₹1,23,017.57 crore in 2021-22.
Foodgrain production increased to the highest ever, from 265.05 million tonnes in 2013-14 to 305.43 million tonnes in 2020-21 (third advance estimate). Horticulture production has increased from 280.99 million tonnes in 2014-15 to 320.48 million tonnes in 2020-21 (second advance estimate), the highest ever for the horticulture sector.
However, the NITI Ayog report on Doubling Farmers’ Income by Ramesh Chand (2017) states that in some cases, growth in output brings increases farmers’ income, but in many cases, the farmers’ income did not increase significantly with the increase in output.
Farmers benefiting from schemes?
The government had increased the MSP for all the mandated Kharif, Rabi, and other commercial crops with a return of at least 50 per cent on the overall India-weighted average cost of production from 2018-19. The MSP for paddy was increased to ₹1,940 per quintal in 2021-22 from ₹1,310 per quintal in 2013-14, marking an increase of 48 per cent. The MSP for wheat was increased from ₹1,400 per quintal in 2013-14 to ₹2,015 per quintal in 2021-22.
Farmers who opposed the farm reform laws and protested on Delhi’s borders had demanded a law for guaranteed Minimum Support Price (MSP). The NSS 77th round shows that the percentage of output sold by households under the MSP ranges between 0 to 24.7 per cent (except sugarcane).
Paddy and wheat growing households dominate the charts of MSP awareness and output sold under it. With over 14 per cent of 14.6 crore landholding farmers (2015-16) getting benefits from the MSP, most farmers are out of the MSP net and continue to sell their produce below the MSP.
The government launched the PM-KISAN in 2019 to provide ₹6,000 per year in three equal installments. A total of ₹1.8-lakh crore has been released to over 11.7 crore farmer families. This benefit does not necessarily go into the capital expenditure in farming as small and marginal farmers struggle to fulfil their basic needs, such as their children’s education and health expenses.
Insurance, credit, and infrastructure
About 29.29 crore farmer applicants enrolled themselves under the Pradhan Mantri Fasal Bima Yojana (PMFBY), launched in 2016. Over 8.99 crore (provisional) farmer applicants have received claims of over ₹1,03,903 crore. During this period, farmers paid nearly ₹21,448 crore as premium, against which claims of over ₹1,03,903 crore (provisional) were disbursed
For every ₹100 of premium paid by farmers, they have received ₹484 as claims. Yet, many States, such as Maharashtra, are now opting out of the scheme saying that farmers are unhappy with the claim settlements. Institutional credit for the agriculture sector had increased from ₹7.3-lakh crore in 2013-14, with a target to reach ₹16.5-lakh crore in 2021-22.
For agricultural mechanisation, from 2014-15 to 2021-22 (as of December 31, 2021). ₹5,130.61 crore has been allocated. On subsidy, about 13.78 lakh machines and equipments were provided to them. About 16,007 custom hiring centres, 378 high-tech hubs, and 16,064 farm machinery banks have been established. But the farm mechanisation is posing a major threat to agricultural labourers.
Under the Agriculture Infrastructure Fund, the government had mobilised ₹7,700 crore for more than 7,300 projects. But experts insist on more investment in infrastructure from the government and the private sector.
Comprehensive policy needed
Farmers say that the government schemes will not help them double their income unless the government policies on agriculture are comprehensive, grant freedom of technology and market, and infuse more money into infrastructure development.
Apex farmers’ organisations such as the Shetkari Sanghatana in Maharashtra say that ad hoc policies and schemes will not help farmers as long as the government intervene in the market to control prices to keep the consumers happy at the cost of farmers.
May 07, 2022