How to double India’s farmers’ income

Source– The post is based on the article “How to double India’s farmers’ income” published in The Indian Express on 6th March 2023.

Syllabus: GS3- Agriculture.

Relevance: Issues related to agriculture policy

Context –On February 28, 2016, Prime Minister Narendra Modi shared his dream of doubling farmers’ incomes in the year when India completes 75 years of Independence.

What is the importance of agriculture?

Unless the incomes of farmers go up, sustained high growth of GDP is not possible. This is because the manufacturing sector starts facing a demand constraint soon after meeting the demand of well-off urban consumers, due to low income of farmers.

Agriculture engages the largest share of the workforce. It is 45.55% in 2021-22 as per PLFS.

Agriculture also provides food and nutritional security to the largest population on this planet.

What are different types of subsidies and support provided by the government to farmers?

Government provides fertiliser subsidy whose budget crosses Rs 2 lakh crore. It provides income support to farmers through PM-Kisan.

Many small and marginal farmers also get free ration of at least 5 kg/person/month through the PM Garib Kalyan Anna Yojana.

There are also subsidies for crop insurance, credit and irrigation. States also dole out power subsidies in abundance, especially on irrigation. Even farm machinery for custom hiring centres is being subsidised by many states.

Combined subsidy is about Rs 4 lakh crore per annum.

What are issues with agriculture policy in India?

Trade and marketing policies adopted by the government are suppressing farmers’ incomes. For example, the ban on exports, the suspension of several commodities from the futures markets, and the imposition of stocking limits on certain commodities.

These are hidden policy instruments of “implicit taxation” of farmers’ incomes. This is not a “pro-farmer approach”. In fact, the approach is pro-consumer. This is the fundamental problem with our policy framework.

The policy of heavy subsidisation along with assured and open-ended procurement of paddy and wheat is creating challenges for the environment.

What is the way forward to improve agriculture in India?

There is a need to realign farmer support policies keeping in mind environmental outcomes. Millets, pulses, oilseeds, and much of horticulture could perhaps be given carbon credits to incentivise their cultivation.

Subsidies support should be crop-neutral. Even if they need to be skewed, they should be in favour of those crops that are benign to the planet’s basic resources.

There is a need for innovations in technologies, products, institutions and policies for more diversified high-value agriculture that is also planet friendly.

Increasing productivity through better seeds and better irrigation is necessary. It will have to be combined with unhindered access to the best markets for their produce.

Diversifying to high-value crops, and even putting solar panels on farmers’ fields as a third crop will be needed.