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Economic Survey 2018: Climate change may lower farm incomes by 20-25%

Survey calls for direct income transfer to farmers, suggests raising area under drip and micro irrigation

Sanjeeb Mukherjee & Sahil Makkar  |  New Delhi 

agriculture, farmers

The 2017-18 Economic Survey while laying down medium-term risks to from – it projects incomes to decline by 20-25 per cent in un-irrigated areas – does not dwell much on the immediate concerns of falling prices of farm produce and dwindling incomes.

At current levels of farm income, the Survey says, adverse impacts of translates into more than a Rs 3,600 per year drop in income for the median farm household.

Quoting from the Manoj Kumar movie ‘Upkaar’, “Mere desh ki dharti sona ugle, ugle heerey moti” (My country’s soil, where crops grow like gold, diamonds, and pearls), to Tulsidas in Ramcharit Manas, “Kaa barkha, jab krishi sukhanee” (What is the use of rain after the crop has dried up), and Allan Savory, “Agriculture is not crop production as popular belief holds -- it is the production of food and fibre from the world’s land and waters”, the Economic Survey 2017-18 says Indian history and literature has contributed to the farmer acquiring mythic status.

In a detailed analysis, the Survey says that the proportion of dry days (rainfall less than 0.1 mm per day), as well as wet days (rainfall greater than 80 mm per day) has increased steadily over time.

“For example, an extreme temperature shock in unirrigated areas reduces yields by 7 per cent for kharif and 7.6 per cent for rabi,” the survey said.

“From a medium-term perspective, the Economic Survey talks of challenges from and increasing weather vagaries, to that extent the direction is fine, but it does not address or talk much about the current problems of Indian agriculture… problems in marketing and falling prices,” Ashok Gulati, Infosys Chair professor for agriculture at the Indian Council for Research on International Economic Relations (ICRIER), told Business Standard.

The survey on its part says that to minimise the impact of the government should drastically extend drip and sprinkler irrigation, replace targeted subsidies in power and fertilisers by cash transfers and review the cereals-centric policy.

Economic Survey 2018: Climate change may lower farm incomes by 20-25%

On farm wages and prices, the Survey says the trend of acceleration in rural wages (agriculture and non-agriculture), seems to have decelerated beginning just before the kharif season of 2017-18, but it is still greater than much of the last three years.

The survey also for the first time computes an index of that finds Maharashtra, Karnataka and Gujarat had greater in 2014-15.

Education, health and sanitation

The Survey notes that the Centre and the states have not increased their expenditure on education, health and sanitation as a per cent of the GDP in the past few years because of fiscal constraints.

“The expenditure on social services by the Centre and states as a proportion of the GDP remained in the range of 6 per cent during 2012-13 to 2014-15. There was a marginal decline to 5.8 per cent in 2015-16 which has moved up to 6.6 per cent in 2017-18 (BE),” the Survey said.

The Survey said various government schemes such as Beti Bachao, Beti Padhao and the Right to Free and Compulsory Education have resulted in an improved student classroom ratio, pupil teacher ratio and gender parity index in education.

The survey emphasised that the both Centre and states need to check the prices for diagnostic tests as out of pocket expenses (OoPE) continues to be high in the country.

“Although, OoPE has declined approximately 7 percentage points during the period 2004-05 to 2014-15, its share is still at 62 per cent as per the National Health Survey 2014-15,” the Survey noted.

"An analysis of prices of diagnostic tests across various cities in India reveals that there are not only wide differences in average prices of diagnostic tests, but the range of prices is substantial," it said. For instance, a lipid profile test can cost anywhere between Rs 90 and Rs 7,110.

Economic Survey 2018: Climate change may lower farm incomes by 20-25%

First Published: Mon, January 29 2018. 23:26 IST