In-depth analysis: Why doubling farm income is still a dream

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Even though the government has not provided concrete data on the doubling of farmers’ income, the available data regarding the different schemes for farmers gives us a glimpse of its current situation.

The latest estimate of farm household income is based on the Farm Household Condition Assessment Survey, conducted by the National Sample Survey Office (NSSO) during the 77th cycle (January – December 2019). According to the survey results, the average monthly income per farm household from all sources was estimated at Rs. 10,218. The average monthly income per farm household was Rs 6,426 as per the previous report of 2012-13. In other words, farm income had increased by 59% until 2019.

But the quality of farm income has changed over this period, with farmers earning more from wages than from agricultural production in 2018-2019. While MSPs have increased and the Center spends on agricultural mechanization, insurance, etc., lack of awareness may prove to be a barrier for the program to reach farmers.

What are the farmers’ incomes?

In 2012-13 (during the 70 NSS cycle), the average monthly farm household income was Rs 6,426, of which Rs 2,071 came from wages, Rs 3,081 came from producing and growing crops, Rs 763 from animal husbandry and Rs 512 from a non-agricultural business.

Data from the 77th round NSS, in 2018-19, showed that the average monthly income rose to Rs 10,218, with the highest income coming from wages (Rs 4,063), followed by income from culture and production (Rs 3,798). There is a substantial increase in livestock income (Rs 1,582 against Rs 763).

Farmers also derive relatively higher incomes from off-farm enterprises and land rental. However, farmers say cultivation costs have almost doubled and their incomes are not keeping up with rising inflation. Salary income was 32% in 2012-2013. It was recorded at 40% in 2018-19. This implies that farmers become day laborers.

An increase in production leads to an increase in income?

The Ministry of Agriculture told the Lok Sabha in April this year that in 2013-2014 the budget allocation for the Ministry of Agriculture was Rs. 21,933.50 crores. This has been increased by more than 5.5 times to Rs. 1,23,017.57 crore in 2021-22.

Foodgrain production increased from 265.05 million tonnes in 2013-2014 to 305.43 million tonnes in 2020-21 (third advance estimate), representing the highest foodgrain production on record. Horticultural production increased from 280.99 million tons in 2014-15 to 320.48 million tons in 2020-21 (second advance estimate), which is the highest ever for Indian horticulture.

However, the NITI Ayog report on Doubling Farmers’ Income by Ramesh Chand (2017) indicates that in some cases, growth in production leads to a similar increase in farmers’ income, but in many cases, farmers’ income has not increased. not increased significantly with the increase in farmers’ income. production.

Farmers benefiting from schemes?

The government had increased the MSP for all compulsory cash crops Kharif, Rabi and others with a return of at least 50% on India’s overall weighted average cost of production of 2018-2019. The MSP for paddy was increased to Rs. 1,940 per quintal in 2021-22 from Rs. 1,310 per quintal in 2013-14, an increase of 48%. The MSP for wheat has increased from Rs. 1400 per quintal in 2013-14 to Rs. 2015 per quintal in 2021-22.

Farmers who opposed agricultural reform laws and protested at Delhi’s borders had demanded a guaranteed minimum support price (MSP) law. The 77th cycle of the NSS shows that the percentage of production sold by households under the MSP varies between 0 and 24.7% (except sugarcane). Paddy and wheat producing households dominate the graphs of awareness of MSP and production sold under MSP. With over 14% of the 14.6 million land-owning farmers (2015-2016) benefiting from the MSP, the majority of farmers are outside the MSP network and continue to sell their products below the MSP.

The government launched the PM-KISAN in 2019 to provide Rs. 6000 per year in 3 equal instalments. A total of Rs. 1.8 lakh crores have been distributed to over 11.7 crores of farming families so far. This amount does not necessarily go into capital expenditure in agriculture, as smallholders and marginal farmers struggle to meet their basic needs such as education for their children and health expenses.

Insurance, credit and infrastructure

About 29.29 million candidate farmers had registered under the Pradhan Mantri Fasal Bima Yojana (PMFBY), which was launched in 2016. More than 8.99 million candidate (provisional) farmers have received applications of more than Rs. 1,03,903 crore. During this period, nearly Rs. 21,448 crore was paid by the farmers as their share of the premium against which claims of over Rs. 1,03,903 crore (provisional) were paid to them. For every Rs. 100 premium paid by the farmers, they received Rs. 484 as claims. Yet many states, like Maharashtra, are now pulling out of the scheme saying farmers are unhappy with the claims settlements.

Institutional credit for the agricultural sector has grown from Rs 7.3 lakh crore in 2013-14 with a target of reaching Rs 16.5 lakh crore in 2021-22.

During the period of 2014-15 to 2021-22 (as of 31 December 2021), an amount of Rs 5130.61 crore has been allocated for agricultural mechanization. 13,78,755 machines and equipment were provided to farmers through subsidies. About 16,007 personalized recruitment centers, 378 high-tech centers and 16,064 agricultural machinery banks have been established. But the mechanization of agriculture poses a major threat to agricultural workers.

Under the Agricultural Infrastructure Fund, the government has mobilized Rs 7,700 crore of agricultural infrastructure in the country for more than 7,300 projects. But experts insist that the government and the private sector invest more in infrastructure.

Global policy needed

Farmers say government programs won’t help farmers double their incomes unless government policies on agriculture are comprehensive, give farmers freedom of technology and market, and put more money into the infrastructure development. Apex farmer organizations such as Shetkari Sanghatana in Maharashtra say ad hoc policies and programs will not help farmers as long as the government continues to intervene in the market to control prices to satisfy consumers at the expense of farmers. farmers.

Published on

May 07, 2022

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