Boosting Farm Income
By Dhurjati Mukherjee
Two recent developments in the agricultural sector merit attention. The first is the constitution of the long-awaited committee to look into the financing of Minimum Support Price (MSP) mechanism. The other development is the release of a report by the Indian Council of Agricultural Research (ICAR) documenting success stories of 75,000 farmers from across the country, noting how technological and policy interventions could lead to overall 150-200 per cent increase in their income in 2020-21 compared to 2016-17.
The terms of reference of the Committee on MSP, however, has made no mention of the farmers’ demand for an MSP guarantee law. The 28-member committee to be headed by Former Agriculture Secretary Sanjay Agrawal, will have three members from the Samyukta Kisan Morcha (SKM) — the farmers’ collective which had spearheaded the year-long protest against the three laws. But the Morcha will be outnumbered as five representatives of farmers’ organisationsare outside the SKM. The announcement comes after the split within the SKM firmed up recently, and both sides are unhappy with it.
The ICAR report has claimed that farmers in Uttarakhand, Bengal Chhattisgarh and Puducherry recorded more than 200 percent rise in their overall income in four years, whereas most of the other States recorded increases in the range of 150-200 percent.
Similarly, another study by SBIshowed farmer income doubled in fiscal 2021-22 compared to FY 18 for certain crops in some States. In all other cases, it rose in the range of 1.3-1.7 times. The study found that the increase in farmers’ incomes, engaged in cash crops, has been more prominent compared to those growing non-cash crops. Allied and non-farm income showed a significant increase of 1.4-1.8 times in most States in tandem with farm income during the period.
According to the study: “Minimum support price increasingly aligned with market-linked pricing and increasing by 1.5-2.3 times since 2014, has been pivotal in ensuring passage of better prices to farmers and has led to optimal price discovery setting ‘floor price benchmark’ for multiple crop varieties (23 as on date)”.
These developments augur well for the sector, though questions remain. The first and foremost is the condition of small and marginal farmers who have not witnessed any increase in their income while most have shown a decline. The rising prices of inputs coupled with lack of availability of water, in some States, have aggravated their problem. Further, the indiscriminate use of chemical fertilizers and pesticides is affecting farmers and their farms. Despite this, the government wants farmers to abandon traditional farming and adopt new technologies. As a result, the cost of cultivation is increasing and the profit is decreasing in comparison.
The government’s efforts to take care of the farmers are adding to their worries. Take seeds, in the last five years, there have been cases of foreign seeds like Bt being expensive but hurting a section of farmers. The claim that such seeds have high yields and no pests has properly no base. In fact, small and marginal farmers have become indebted.
The National Sample Survey data showed that around 80 percent of farmers in Andhra Pradesh are in debt, while in Punjab and Maharashtra, the figure averages 65 per cent. These States have the highest number of farmer suicides. The country can fill the stomachs of the subsistence farmers if the farmers get the right price for their produce, proper storage, marketing facilities, reduction of cost of agricultural produce, ban on entry of capitalists in this business.
Meanwhile, one may refer to a report by the International Food Policy Research Institute which estimated that India would be facing a 16 percent drop in food production with the number of those at risk for hunger increasing by 23 percent by 2030 due to climate change. It has been reported that shortages of water, land and energy combined with the increased demand from population and economic growth will create a global food shortage around 2050 and India is no exception.
This is reinforced by a very recent Supreme Court order that aptly stated that no person should die of hunger “but that is happening, citizens are dying of hunger”, asking the Centre and the States to reach out to farmers and migrants who form the country’s backbone. It further pointed out that the Centre had failed to undertake any exercise to determine the coverage under the National Food Security Act as a result of which a staggering 10 crore people had been left out of the purview of the Act and lakhs of migrants failed to secure foodgrains during the pandemic despite the apex court issued a slew of directives in this regard.
This being the present situation in the agricultural sector, there is need to take adequate measures to boost agricultural growth. Obviously, productivity has to increase in the States that are below the national average. Added to this, one cash crop would have to be grown to increase farmers’ income. For this, technological support is very much needed and research institutes such as the ICAR have to come forward in locating at least 200 to 250 districts where cash crop production has to be encouraged in a big way.
In this connection, one may refer to the endeavour of ITC Ltd. of piloting an app in seven States with 200 farmers’ producers organisations (FPOs) engaging 40,000 farmers across four value chains – wheat, paddy, soya and chilli. It plans to expand to other States and across 20 value chains. Further, the company intends to engage with 4000 FPOs involving one crore farmers, according to ITC Managing Director Sanjiv Puri.
With shrinking public investment in agriculture, government expenditure as a percentage of GDP declined from 38 to 23 per cent between 2001 and 2016 and the picture remained the same till 2020. Added to this, international aid allocations for agriculture declined by around 18 to 20 percent during that period. Experts believe that the question is how public-private partnerships can unlock opportunities for private investment to complement public resources and capacity to generate improved food security, particularly for the most vulnerable populations.
International scientists have been of the opinion that responsibility does not lie solely with the State, but with civil society too. There is need for allocation of more resources from the Centre, promoting good nutrition through education, promoting better local farming methods, increasing local food processing and, of course, better technological inputs which India’s scientific institutions can provide.
Only then can India emerge as a major food hub in the world by increasing agricultural production and productivity. With proper technological inputs and support from the government, this needs to be seriously considered. More so because there is enough demand in certain categories of crops and the country can earn reasonable profits by maintaining sustainable exports. Importantly, the farmers must be consulted and be a part of the decision-making process. — INFA