An SOS call from the Indian micro-irrigation industry

News: Despite the demonstrated benefits of micro irrigation in the sustainability of Indian agriculture, the industry that provides the resources for it is currently struggling to survive.

What are the benefits of micro irrigation system?

– water savings in comparison with flood irrigation.

– decrease in electricity consumption.

– the adoption of micro irrigation results in savings on fertilizers.

– results in the increase of the average productivity of fruits and vegetables.

– increase in farmers’ income.

What are the issues faced by the manufacturers & suppliers of drip irrigation systems?

Issue of prolonging the selection process and extending delays: In most Indian states, despite the availability of funds, scheme applications are processed only at the end of a financial year. This is done typically to achieve pre-set targets in what is famously known as the ‘March rush’. This tends to discourage farmers from availing the benefits offered under this scheme.

Delays in the reimbursement of subsidies to industries: Unlike other subsidies that are directly transferred to beneficiaries, those for installing drip irrigation systems are transferred to vendors only after due diligence. Further, there is no fixed timeline for the inspection and testing of an installed system. This results in a long pendency of disbursement against bills.

Governments continue to dishonor their commitments to support industries: For instance, under the scheme, the prices of equipment and installation services are fixed by the government. These have not been revised in the past five years. However, raw material costs, however, have risen by at least 50%.

What reforms are needed?

– set a timeline for each stage, from an application by a farmer to the execution and payment disbursement.

– strengthen the Centre’s monitoring mechanism by insisting on a periodic review of applications, approvals, work orders and actual installations.

– establish a central information system to monitor the scheme’s progress.

– deploy direct benefit transfers for subsidy sums to go straight into the bank accounts of farmers.

– ask state administrations to operate the scheme throughout the year on a first- come-first-serve basis.

– link equipment prices to either inflation or underlying input costs.

Source: This post is based on the article “An SOS call from the Indian micro-irrigation industry” published in Live Mint on 19th Nov 2021.