Doubling farmers income – not a mere slogan

Prime Minister Modi’s promise to double farmers income by 2022 [the 75th anniversary of India’s independence] is being looked at with lot of scepticism in opposition quarters as also among some critics who look with a microscope every single opportunity to embarrassment him and his government.

What is the basis for such scepticism? First, driven by a pre-meditated mindset, they are unable to see or not wanting to see any action happening on the ground. Second, they cite no increase in minimum support price [MSP] of food under Modi – dispensation to infer as to how then, farmers income could be doubled? Both points require careful scrutiny.

To see what happens to MSP alone can be misleading. This is because farmers income depends on what price they actually get from sale of their produce. And, majority of small and marginal farmers are forced to undertake distress sale at price much lower than MSP; courtesy, gaping holes in the state procurement systems led by Food Corporation of India [FCI], compulsion of having to sell only in mandis [courtesy APMC [agriculture produce market committee] Acts] and poor roads & communication networks.

In view above, the MSP level has absolutely no relevance whatsoever to the income level of farmers. Therefore, it would be preposterous to draw any conclusions about their financial status solely on a reading of MSP. Had there been any correlation, they would have been better off now as during 2004-2014 [prior to Modi taking charge], there was steep increase in MSP of wheat and rice.

The other two key factors behind continued misery of farmers are low crop yield and high vulnerabilities to errant weather. The low yield in turn, is due to low irrigation [55% of cultivated area is rain-fed], lack of technological breakthroughs and ineffective extension machinery which makes transmission of new technology to farmers difficult. In a drought year, whatever little they grow is also lost.

When, Modi talks of increasing farmers income, he has a sincere intent to unshackle them from all these constraints and has indeed taken credible steps in that direction. Thus, in budget for 2016-17, the finance minister [FM] has mooted a mammoth capital spend of Rs 86,500 crores over 5 years to complete 89 stuck irrigation projects [of these, 23 to be commissioned by March, 2017]. This will help in irrigating 8 million hectares of land.

The government also proposes to use a large portion of an all time high allocation of Rs 38,500 crores under MGNREGA [Mahatma Gandhi National Rural Employment Guarantee Act] during 2016-17 for digging 500,000 farm ponds and wells for conserving/storing water. This will give a further boost farmer’s ability to keep their fields immune from the vicissitudes of undependable rainfall and excruciating impact of drought.

For decades, farmers have used fertilizers as dictated by agricultural universities/ICAR [Indian Council of Agriculture Research] institutes as ‘general recommendations’ which need not necessarily be in sync with requirements of soil. This resulted in imbalanced use and low efficiency adversely impacting yield. The government seeks to change all this by issuing soil health cards [SHC] to all 140 million farmers to guide them apply nutrients as per soil needs.

While, above steps will help farmers increase crop yield, the government has taken a number of steps to help them fetch a good price for their produce. These include building rural roads to connect 65,000 new habitants [Rs 27,000 crores allocated for this]; extending decentralized procurement to all remaining states and putting all centralized procurement by FCI on e-platform; setting up of an e-national market integrating over 500 market yards enabling seamless trading in any part of the country [all concerned states have been requested to amended APMC Act].

At present, humongous quantities of agriculture produce particularly fruits and vegetables valued at about Rs 100,000 crores is wasted annually due to lack of proper storage/refrigeration, handling and transportation facilities. In this backdrop, the government has permitted 100% FDI [foreign direct investment] in food-processing which will give a boost to required investment in cold chain infrastructure thereby helping farmers avoid the wastages and improve their income.

In a bid to encourage a farmer generate income from diversified sources, Modi advocated “three pillars” on which farming should rest. Thus, he should allocate one-third of his resources to growing crop, one-third to growing timber tree on the fence and remaining 1/3rd to animal husbandry/poultry farming etc. He also encouraged farmers to go for processed food such as selling ghee [instead of milk] or pickles [rather than mango] to fetch better price.

Even while taking all possible steps to create a conducive eco-system for boosting farmers income, the government has gone whole hog rescuing them in the event of natural calamities, hailstorms, unseasonal rains etc leading to loss of crop. Under the Pradhan Mantri Phasal Bima Yojna [PMPBY] launched early this year, it has decided to compensate them for the crop loss for a miniscule premium and arrange for prompt release of compensation.

Thus, a farmer needs to pay uniform premium of 2% of sum assured for all kharif [April-September] crops and 1.5% for all rabi [October-March] crops. For annual commercial and horticultural crops, the premium will be 5%. The excess of actual over the rate paid by farmers will be subsidized by the government. A farmer will be eligible for compensation on loosing 33% of crop [under extant insurance schemes, the trigger was 50%].

Unlike all previous schemes, under PMPBY, the government proposes to fully leverage technology for determination of the loss. Smart phones will be used to capture and upload data of crop cutting to reduce the delays in claim payment to farmers. Remote sensing will be used to reduce the number of crop cutting experiments. During 2016-17, an allocation of Rs 5500 crore has been made for the scheme and the amount will be raised in following years to achieve at least 50% coverage by 2018-19.

In short, Modi – government has taken all the right steps needed to back up its commitment to double farmers income by 2022. It needs the support of all stakeholders to achieve the goal. It would be a pity if opposition parties do not shed their current vilification campaign only to score political brownie points.