According to Economic Survey (2019-20) which was recently tabled in the parliament, ” Approximately 70% of the rural households still depend primarily on agriculture for their livelihood, in which 82% of farmers are small and marginal (who own less than 1 acre of land each). In India, agriculture is most important part of livelihood to the people.
Contribution towards agriculture and allied sector in GDP is gradually decreasing every year. This proof is from the Survey (2019-20) which says that contribution of agriculture and allied sector to National income has gradually declined from 18.2% in 2014-15 to 16.5% in 2019-20.
A big question arises in everybody’s mind after seeing all these catastrophic effects, “Is it possible to double farmers income?” The answer is Yes.
Government has constituted an Inter-Ministry Committee under the chairmanship of Dr. Ashok Dalwai who is Chief Executive officer, National Rain-fed Area Authority, Dept of Agriculture, Cooperation & Farmer’s welfare in April 2016 to examine issues related to doubling of Farmer’s income in real terms by the year 2022-23.
The Committee’s Sources To Double Farmers Income
The committee on doubling Farmer’s income in its report in 2018 has identified 7 different sources for income growth. They are:
- 1. Improvement in crop and livestock productivity
- 2. Resource use efficiency or saving in the cost of production
- 3. Increase in the crop intensity
- 4. Diversification towards high value crops
- 5. Improvement in real price received by farmers
- 6. Shift from farm to non-farm occupation
- 7. Establishing a national cold supply chain
Improvement In Crop And Livestock Productivity
For improvement in crop and livestock productivity, we can see that there is an increase in production of crop and livestock from previous years. Today, India ranks first in production of milk, jute, pulses, livestock (cost-less, buffaloes) and second in production of rice, wheat, fruits and vegetables, groundnut, sugarcane, tea in the world.
There is also increase in production from previous year, as in the year 2017-18, the total food grain production is 277.49 million tonnes which raised to 281.37 million ton in 2018-19 and also in horticulture sector, there was an increase from 311.71 million tonnes to 314.87 million tonnes from 2017-18 to 2018-19. Through this data we can examine that there is an improvement in crop production every year. Coming to the livestock sector, milk production accelerates and fishery production increases by each passing year.
The Committee has mentioned about the resource use efficiency. Here, they have discussed about increase in productivity. Several steps are taken by Government for increasing the efficiency like promotion of neem-coated urea, distribution of soil health card etc. According to a report, neem-coated urea is a good replacement for urea. This is because, it reduces 20% of urea cost hence increasing productivity. Another major problem was addressed by the Government in food processing industries which has shown a grave loss of Rs 93,000 crore in harvest and post-harvest processes including loss during transportation, reported in 2016 by Ministry of Food Processing Industries. For solving this problem, the government gave extra attention towards agri-warehousing, cold storage, reefervan facilities etc and also provided Kisan rail and Kisan udaan for transportation.
Increase in the crop intensity
In the third point given by the committee, they mentioned about the increase in cropping intensity. Here, I add that cropping intensity refer to rise of a number of crops from the same field during one agricultural year. In 2014-15, cropping intensity of India is 136% and in 2017-18 it has increased and reached to 141.6%.The main reason for this increase is due to irrigation facilities.
Diversification towards high value crops
In the fourth point committee mentioned about diversifying towards high value crops. Crop diversification are required because it is directly related to demand and supply and it affects the price of crops. Till date, the government has supported diversification by fixing minimum price for 24 crops which directly helps the farmer to promote their crops. These 24 crops excludes fruits and vegetables as they are perishable in nature and its demand is more compared to supply.
Improvement in real price received by farmers
In their next point they have given about the improvement in real price received by farmers. It is a serious problem faced by farmers. Sometimes price received by a farmer is very low compared to the cost of cultivation and the same crop is sold at higher prices in the market.
For handling this problem, government has taken many initiatives, for example, direct transfer of money in farmers account, E-Nam, Rural Hart’s, FPOs, SHG etc. which has shown impact in farmers lives. In India, more than 80% farmers are small and marginal and hence their bargaining power is very low. For handling this problem FPOs and self-help group have been established. Government targets to open 10,000 FPOs in the upcoming year 2020-21. Government may fix minimum price for some crops and also try to buy them directly from the farmers without any middleman. The payment mode will be online and would be helpful to the farmer
Shift from farm to non-farm occupation
For doubling the farmer income, the committee also gave a recommendation to shift from farm to non-farm occupation.
According to a rural survey, carried out by the NABARD, the average annual income level of non-agricultural household in 2015-16 stood at Rs 87,228/- and all households (agricultural as well as non-agricultural) reported an average annual income of Rs 96,708/-. It means income of non- farm household is 23% higher than farm households.
In rural area, basically non-farm activities are mainly in the dairy sector. For this, Government has set a target of doubling milk production by the year 2025, keeping in view the immense potential of growth and development in the dairy sector and also milk processing capacity will rise to 108 million metric tonnes from the current 53.3 million metric tonnes. The Government is also focusing on Blue economy and has a target of 200 lakh tonnes and hope to increase the fishery export to Rs 1 lakh crore by 2024-25.
For food processing, the Government has started a scheme named PMKSY (Pradhan-Mantri Kisan Sampada Yojana). The Government provides loan for small, micro and medium enterprises which is really helpful to farmers.
Establishing a national cold supply chain
Last point mentioned by the committee is about establishing a National Cold Supply Chain. As discussed earlier, there is a huge loss during harvest and post-harvest processes. Thus a good food supply chain is essential to minimize this problem. For this, the Government has taken several steps for avoiding losses. For example GST which help to minimise the time duration in transportation, promotion of food processing techniques etc. During budget 2020-21, the Government has announced, village storage scheme maintained by SHGs. To build a seamless National cold supply chain for perishable goods including milk, meat and fish, Indian railway had set up a Kisan rail Dhruv PPP arrangement, refrigerator coaches in express and Kisan Udaan etc.
Government has taken many steps for doubling the farmers income and the effects are positive. According to the Ministry of Programme implementation, national income of per house hold in 2013-14 is Rs 74,924/-. And now, it is Rs 1,35,048/- (in 2019-20). In comparison to the previous year (2019-20) to 2020-21, there is an increase at the rate of 6.8%
The states Bihar and UP are the least in income generation . According to this report however, we can see that doubling farmers income is possible in these states also. In case of Bihar, 2012-13 per household income is only Rs 26,908/- but in 2018-19 it is increased to Rs 43,822/-. In case of UP, per household income is only Rs 33,482/- in 2012-13 but it has increased at level of Rs 70,412/- in 2019-20. From this we can show that there is a huge possibility of doubling the farmers income.
Also, if you have interests in reading about the Effect of Covid-19 on Food Security, do check our article.