Are sunny days still good for agricultural income?

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On February 28, 2016, Prime Minister Narendra Modi pledged to double farmers’ incomes by 2022-2023 – his gift to the country in its 75th year of independence. In the six years since, the Union government has failed to give the most basic figures on farmers’ incomes in 2016 and their current incomes, making it impossible to know whether farmers’ incomes have double.

Instead, ministers and officials have made a series of statements over the past two years on the issue. In 2021, Ramesh Chand, a member of the government think tank NITI Aayog, admitted that the target would not be met due to the repeal of three agricultural laws passed by Parliament in September 2020. The laws, fearing to encourage the corporatization of agriculture, sparked protests across the country.

Contrary to Chand’s statement, Union Agriculture and Farmers’ Welfare Minister Narendra Singh Tomar during the 2022 budget session in Parliament listed 17 programs initiated by the Center and said that ‘in the absence of income data, monitoring the performance of these programs was sufficient. prove that the goal of doubling farmers’ income was within reach. “The progress made so far indicates that we are on the right track,” Tomar said. The data, however, makes this claim dubious.

In three of the past five years, the Union Agriculture Department has spent less than it budgeted on central government-sponsored agricultural programs. In 2019-20, actual spending for these programs was 29% lower than the allocated amount. In 2020-2021, the deficit was 18%. Actual spending for 2017-18 was also 4% below budget.

This year (2022-23), the budget allocated to centrally sponsored programs is Rs 105,710 crore, which is among the lowest since 2019-2020, when the Center deployed PM-Kisan Yojana. Under the PM-Kisan scheme, the Center provides income support of Rs 6,000 per year to each land-owning agricultural household in three equal instalments.

As many as 31.6 million households received the payout in December-March 2018-19, just 33% of the country’s 93.09 farming households in 2018-19, according to the latest situation assessment survey released by the National Statistics Office ( ONS), in September 2021.

This led to a large increase in the overall allocation that year.

The scheme’s coverage has since increased significantly and almost 107.6 million land-owning farmers have received the April-July 2022-23 tranche, according to the government’s scoreboard. But Rs 6,000 for one year is clearly not enough. “The annual income of an average farm household in India is nearly Rs 1,20,000. An increase of Rs 6,000 can only make a marginal difference as it does not even cover inflation,” said Arun Kumar, former professor of economics at Jawaharlal Nehru University. , Delhi.

The Pradhan Mantri Fasal Bima Yojana, the Centre’s flagship crop insurance program launched in 2016, covered only 46% of farming households (43 million) during the 2019 kharif season. By 2021 kharif, the program had recruited 49.2 million farmers. “The program faces multiple implementation challenges,” said R Ramakumar, Professor at the School of Development Studies, Tata Institute of Social Sciences, Mumbai.

Although the programs can serve as a measure of development and support for farmers who choose to enroll, assuming global participation by all farmers can be misleading. Naturally, real revenue growth has also been limited since 2016.

Agriculture does not pay

In 2018-19, some 54% of rural households were engaged in agriculture, according to the ONS, up from 57.8% in 2012-13. The reason for this fall is quite clear.

While the monthly income of an agricultural household has increased from Rs 6,426 in 2012-13 to Rs 10,218 in 2018-19, the share of income from cultivation has decreased. In 2012-2013, households derived 48% of their income from agricultural production. The share fell to 37% in 2018-2019. Indeed, wages (39.8%) have now replaced agriculture as the main source of income for agricultural households. At the same time, the cost of cultivation has increased over the six years, from Rs 2,192 per month in 2012-13 to Rs 2,959 in 2018-19, according to the ONS.

The share of indebted agricultural households fell slightly between the two years, but more than half of households have loans. The average amount of debt has also increased from Rs 47,000 in 2012-13 to Rs 74,131 in 2018-19, according to ONS data.

Land fragmentation is the other challenge. The share of marginal agricultural households, owning less than 1 ha, fell from 69.44% to 70.44% between 2012-13 and 2018-19, according to the ONS. But the share of small and medium farmers (owners of 1.01 ha to 10 ha) fell from 30.52% to 29.2% during the period. The share of wealthy farmers remained constant at 0.4%.

Designed to fail

The goal was still unrealistic, Ramakumar said. “This would have been possible if the government had instituted a clear course correction in its agricultural policy. This should have included a significant increase in public investment, an increase in subsidies to farmers, an increase in the supply of credit and an increase in 50% of the minimum support price above the cost of production. At least we could have increased farm incomes considerably, even if we did not double them, “he added, demonetization and the GST (tax on goods and services) have also hurt the prospect of increasing farm incomes, he said.

Furthermore, if one were to accept the government’s claim that the quality of life for farmers has improved, why has there been an increase in the number and intensity of farmer protests over the for the past five years? According to an analysis by State of India’s Environment (SiE) in Figures -2018, an annual publication of Down To Earth, the country reported 35 major protests in 2017. But since 2020, the number of major agricultural protests has skyrocketed to 165 Some 22 states/Union Territories have witnessed protests since 2020, compared to 15 states in 2017. There were three main reasons behind the 2017 protests: crop loss, demand for fair prices, and procurement forced agricultural land for development projects.

According to SoE-2021, in 2020 more than 50% of protests were against the economic and agricultural policies of the Center and state governments – a clear indication that the policies are not helping farmers. Supply and prices were the second most common reasons for protests (23%), while land acquisition was third (10%). Insurance, loan waivers and poor agricultural infrastructure were the other causes.

Suicide deaths among farmers, which are already at an uncomfortably high number, refuse to ebb. In 2020, as many as 5,579 farmers or cultivators died by suicide, an average of more than 15 farmer deaths per day, according to Accidental Deaths & Suicides in India, published by the National Crime Records Bureau. In 2019, the number was 5,957, preceded by 5,763 in 2018, 5,955 in 2017 and 6,270 in 2016.

Kumar said the solution lies beyond the agricultural sector, in the macro economy. Pass legislation that mandates a “living wage” for workers and sets a Minimum Support Price (MSP) for all crops after taking into account the full cost of production (including items such as the cost of labor internal labor and equipment). “The demand for food will increase as the poor will then be able to afford an adequate amount of food. As a result, the market price will rise even beyond the current MSP, ensuring higher prices for farmers,” Kumar said.

A glimpse of this was visible during the pandemic, when the Center distributed free cereal. “Grain stored in government granaries has been distributed and consumed by the poor. This indicates demand. But the poor cannot afford to buy enough food with their current income. Ensuring decent wages will help. also the problem of malnutrition,” says Kumar.

(This was first published in the print edition of Down To Earth July 16-31, 2022).

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