Doubling Farmers’ Income | 24 Dec 2018

Last Updated: October 2022

Why in News?

• In 2018, the Union Cabinet approved the country’s first Agriculture Export Policy with an aim to double farmers' income.

  • The Government has set a target of doubling farmers’ income by the year 2022.

Why is there a Need to Double Farmers' Income?

• Past strategy for development of the agriculture sector in India has focused primarily on raising agricultural output and improving food security.
• The strategy did not explicitly recognise the need to raise farmers' income resulting in low income of farmers.
• Farmers' income also remained low in relation to income of those working in the non­ farm sector.
• India also witnessed a sharp increase in the number of farmers suicides due to losses from farming, shocks in farm income and low farm income.
• The low farm income is forcing more and more cultivators, particularly the younger age group, to leave farming.
• This can have an adverse effect on the future of agriculture in the country, leading to food insecurity.
• Therefore, there is need to double farmers income to promote farmers' welfare, reduce agrarian distress and bring parity between income of farmers and those working in non-agricultural professions.

What is the Broad Strategy for Improving Farmers' Income?

• Improvement in Agricultural Output Viz Productivity:
  
  • Area- agricultural output has to be increased through access to irrigation and technological advancement.
• Resource use efficiency or saving in cost of production:
  • Increase in cropping intensity, i.e., the ratio of Net Area Sown to the Total Cropped Area - by raising short-duration crops after the main Kharif and after the main Rabi season so that agricultural land does not remain unused for half of the productive period.
• Diversification:
  • Towards high value crops like fruits, vegetables, fiber, condiments & spices and sugarcane.
  • Towards other allied enterprises like forestry, dairing rather than depending primarily on crop cultivation.
• Shifting Cultivators to Non-Farm Occupations:
  • Non-farm sectors provide 2.76 times more productive employment than agriculture sector in rural areas.
• Improvement in terms of trade for Farmers:
  • Use of CPIAL (Consumer price index for agricultural labour) as a deflator to change nominal farm income to real farm income.

Analysis of Farmers' Income: What is the Scenario?

• Current Scenario of the Income:
  • The benchmark estimated annual income was Rs 96,703 in 2015-16 which was taken as a base year. This comes to Rs 8,059 per month. As such, the target income for doubling by 2022 is Rs 21,146 per month (taking inflation also into account).
    • However, the estimated monthly income of farm households in 2018-19 was Rs 10,218 per month in nominal terms. It is nowhere near the target of Rs 21,146 per month.
  • As per the survey results, conducted by the National Sample Survey Office (NSSO), the average monthly income per agricultural household, from all sources, was estimated at Rs 10,218 when compared to Rs 6,426 in 2012-13.
    • In other words, the farm income had risen by 59% till 2019. But, in this period, their earnings came more from wages than from crop production in 2018-19.

• Farmers’ Earnings:
  • The 77^th NSS round data, in 2018-19, showed that the average monthly income has gone up, of which the highest income comes from wages, followed by income from crop cultivation and production.
    • There is a substantial rise in income from animal farming.
  • The farmers are also earning comparatively higher income from non-farm businesses and are leasing out land.
    • Income from wages was 32% in 2012-13 which was recorded to be 40% in 2018-19. This implies that farmers are turning into daily wage laborers.

What are the Measures Taken by the Indian Government in this Regard?

• Institutional Reforms
  • Pradhan Mantri Krishi Sinchai Yojana, Soil health card, and Prampragat Krishi Vikas Yojana: Aiming to raise output and reduce cost.
  • Pradhan Mantri Fasal Bima Yojana: To provide insurance against crop and income loss and to encourage investment in farming.
  • Interlinking of rivers: To raise output and farm incomes.
  • Operation Greens: to address price volatility of perishable commodities like Tomato, Onion and Potato (TOP).
  • PM Kisan Sampada Yojana: To promote food processing in a holistic manner.
• Technological Reforms
  • Initiating E-NAM: The National Agriculture Market (eNAM) is a pan-India electronic trading portal which networks the existing APMC mandis to create a unified national market for agricultural commodities.
  • Technology Mission on Cotton: This aims to increase the income of the cotton growers by reducing the cost of cultivation as well as by increasing the yield per hectare through proper transfer of technology to the growers.
  • Technology Mission on Oilseeds, Pulses and Maize (TMOPM): The schemes implemented under TMOP are:
    • Oilseeds Production Programme (OPP)
    • National Pulses Development Project (NPDP)
    • Accelerated Maize Development Programme (AMDP)
    • Post Harvest Technology (PHT)
    • Oil Palm Development Programme (OPDP)
    • National Oilseeds and Vegetable Oils Development Board (NOVOD)
  • Mission for Integrated Development of Horticulture (MIDH): It is a scheme for the holistic growth of the horticulture sector covering fruits, vegetables, root & tuber crops, mushrooms, spices, flowers, aromatic plants, coconut, cashew, cocoa and bamboo.
  • Sugar Technology Mission: It aimed at reducing the cost of production of sugar and improving sugar quality through steps for improvements in productivity, energy conservation and improvements in capital output ratio.
  • National Mission on Sustainable Agriculture: It aim at promoting sustainable agriculture through a series of adaptation measures focusing on ten key dimensions encompassing Indian agriculture namely; ‘Improved crop seeds, livestock and fish cultures’, ‘Water Use Efficiency’, ‘Pest Management’, ‘Improved Farm Practices’, ‘Nutrient Management’, ‘Agricultural insurance’, ‘Credit support’, ‘Markets’, ‘Access to Information’ and ‘Livelihood diversification’.
  • Other Schemes: In addition, schemes relating to tree plantation (Har Medh Par Ped), Bee Keeping, Dairy and Fisheries are also implemented.

What Steps Need to be Taken?

• Intervention of the Government: The government schemes will not help them double their income unless the government policies on agriculture are comprehensive, grant freedom of technology and market, and infuse more money into infrastructure development.

  • Ad hoc policies and schemes will not help farmers as long as the government intervenes in the market to control prices to keep the consumers happy at the cost of farmers.

• Need for Technology & New Practices: The country needs to increase the use of quality seed, fertiliser and power supply for agriculture. Adoption of agronomic practices like precision farming to raise production and income of farmers substantially.

  • Since India is a diverse country where the majority of agriculture is monsoon dependent therefore interventions are needed which include research, technology promotion, extension, post-harvest management, processing and marketing, in consonance with the comparative advantage of each State/region and its diverse agro-climatic features.

• Expansion in Required Areas: Area under irrigation has to be expanded by 1.78 million hectares and area under double cropping should be increased by 1.85 million hectares every year.
  • Besides, the area for fruits and vegetables is required to increase by 5% each year.
• Improvement in Livestock Management: In the case of livestock, improvement in herd quality, better feed, increase in artificial insemination, reduction in calving interval and lowering age at first calving are the potential sources of growth.
• Need for Comprehensive Reforms: About one-third of the increase in farmers' income is easily attainable through better price realization, efficient post-harvest management, competitive value chains and adoption of allied activities.
  • This requires comprehensive reforms in market, land lease and raising of trees on private land.
• Enhance Participation: Most of the development initiatives and policies for agriculture are implemented by the States. Therefore, it is essential to mobilise States and UTs to own and achieve the goal of doubling farmers' income.
• Need to Liberalise Agriculture: To attract responsible private investments in production and the market. Similarly, FPO (Farmers Producer Organisation)/FPC (Farmers Producer Company) can play a big role in promoting small farm businesses.