Multiple policies at various levels hurting farmers' income: Eco Survey

Suggests use of 'agri-stack' for better targeting of fertiliser subsidies

India may have to abandon the old playbook of moving from agriculture to industry and services as the economy matures for its food, physical, and economic security, the Economic Survey, tabled in Parliament on Monday, said.

However, policies of governments at various levels and working at cross-purposes are hurting farmers’ interests, destroying soil fertility, and depleting groundwater, the Survey said.

The Survey advocated an Indian “development” model centred round agriculture as a panacea for many problems, including declining jobs and incomes.

It said a “return to roots” policy in farming practices and policymaking could generate higher value addition from agriculture, boost farmers’ income, create opportunities for food processing and exports, and make the farm sector both fashionable and productive for India’s urban youth.

The Survey cautioned against including sensitive food commodities like common rice, wheat, and most pulses in futures trading until markets developed more.

The government recently increased the number of commodities eligible for derivatives trading from 91 to 104 on March 1, 2024.

The Survey prescribed better targeting of fertiliser subsidies using the “Agri Stack” digital system to ensure that a fixed quantity of subsidised nutrients was sold to only farmers identified for the purpose.

It suggested directly transferring fertiliser subsidies to farmers through E-RUPI, a digital payment mechanism, and a pilot in one district of a few states.

In the Interim Budget, presented in February, the allocation for fertiliser subsidies was Rs 1.64 trillion for 2024-25 as against the Revised Estimates of Rs 1.89 trillion for the preceding financial year. The Survey underlined the importance of agricultural research, saying funding for this needed to be raised as one rupee invested in this (including education) gave a return of 13.5 rupees. The Survey said a national mission on edible oils should be launched on the lines of the “National Mission on Oil-Palm”.

For inflation control, among other things, the Survey advocated high-frequency price-monitoring data for essential food items. The data is to be collected by different departments linked in such a way that the build-up of prices at each stage from the farm gate to the final consumer is quantifiable and can be monitored.

MGNREGS work demand not correlated to rural distress

MGNREGS work demand does not directly correlate with increased rural distress at a micro-level and data from the last financial year shows states like Kerala and Tamil Nadu use more funds under the flagship rural employment scheme, according to the Economic Survey. It said that if that was the case then data trends should show that States with more poverty and higher unemployment rates use more of the scheme’s funds and generate more employment person-days. Citing the FY24 data, the Survey said that in FY24 Tamil Nadu had less than 1 per cent of the country’s poor population, and accounted for nearly 15 per cent of all MGNREGS funds released.