Doubling farmers' income

Doubts persist over NITI Aayog's grand plan

Doubling farmers’ income by 2022, the 75th anniversary of India’s independence, sounded almost utopian when Prime Minister Narendra Modi first talked about it shortly after assuming office. But the NITI Aayog has come up with an action plan, which includes, among other things, some basic agricultural sector reforms and amendments in marketing and land related laws — to make a good fist of this daunting task. A striking feature of the NITI Aayog’s road map is that it does not rely solely on old-school tactics such as pushing up farm production or hiking minimum support prices (MSPs). Such measures have failed to deliver the desired income growth. There are several reasons for doubts to persist — emanating largely from the lack of political will and administrative competence at the level of state governments, which are going to be responsible for the on-ground implementation. Yet, this is a worthwhile goal to strive towards because at present, over one-fifth of Indian farmers live below the poverty line and many others just manage to subsist. Under business as usual, the rural poverty ratio might swell to over 50 per cent in the foreseeable future.

The strategy mooted now lays stress on farmer-friendly policies; reforms in land leasing to enable tenant farmers to access institutional credit and government subsidies; expansion of irrigation; efficient use of inputs; and extension of the green revolution to areas that have remained agriculturally backward. This apart, it seeks to revamp farm marketing to allow greater private participation; encourage contract farming; direct sale of farm produce to end-users to eliminate middlemen; and greater use of electronic platforms for transparent price discovery. These measures can raise producers’ share in consumer spending. The NITI Aayog believes that the area under irrigation can be doubled with available water by the use of micro-irrigation techniques such as drip irrigation and better agronomic practices. This, coupled with the construction of farm ponds to gather rainwater, can help realise the objective of “more crop per drop” and har khet ko pani (water for every field). Besides, the use of fertilisers and improved seeds, including transgenic seeds, is sought to be stepped up substantially to boost crop productivity with lower costs. Another significant component of this game plan is to promote diversification of farming to allied activities like livestock, poultry, bee-keeping, agroforestry, and similar others which do not require much land. 

In this regard, the remarkable performance of Madhya Pradesh is being seen as a blueprint for reform. Between 2010 and 2015, the state clocked an average annual agricultural growth rate of 13.9 per cent — delivering a cumulative growth rate of 92 per cent over the period. However, given the excessive population pressure on the farm sector and rapidly shrinking land holdings, no strategy to boost farmers’ incomes will work unless steps are simultaneously taken to create lucrative employment in the non-farm rural sector. It is, therefore, imperative to facilitate the movement of some farmers out of agriculture to release land for expanding farm holdings of others to a viable size. Though most of the mooted actions do not have substantial financial implications for states, some of them, notably marketing reforms, might adversely affect their revenues which the Centre may need to compensate them for.