Doubling farmers' incomes

The govt's goal or how it plans to achieve it is unclear

The more the government and its functionaries talk about their commitment to double farmers’ incomes, the more they compound the confusion over this issue. Though this has been one of the promises made in the 2014 election manifesto of the ruling party, Bharatiya Janata Party, and talked about frequently by Prime Minister Narendra Modi and his ministerial colleagues, the fact that the base year for it will be 2016-17 and the target year 2021-22 is emerging only now. There is yet no clarity as to whether it is the real income (adjusted for inflation) or the nominal income that the government intends to double, although, to be worthwhile, it has to be the real income. Misgivings arise because the government told Parliament recently that the committee set up to go into various issues related to doubling of farm incomes would study the “current income” of farmers and agricultural labourers without mentioning the term “real income”.

It is worth noting that income at current prices tends even routinely to double every five to seven years. This is borne out by the National Sample Survey Organisation (NSSO) data on farm income collected every 10 years. The latest survey showed that the average earnings of farmers at current prices (nominal income) almost tripled from Rs 2,115 a month in 2002-03 to Rs 6,426 in 2012-13. However, the noteworthy point here is that the increase of this order – almost 11.7 per cent a year – did not ease farmers’ distress, which, actually, peaked during this period. The incidence of farmers’ suicides, too, did not abate in these 10 years. Doubling of farm incomes again in the next five years will, therefore, be meaningless unless it mitigates farmers’ woes.

It will, of course, be naïve to presume that the desired increase in farmers’ earnings can come from farming alone; it has to be total remunerations from various farm and non-farm rural economic activities. Allied sectors, such as animal husbandry and beekeeping, are known to be relatively more lucrative than crop farming. Horticulture, floriculture, herbal farming and farm forestry are among the high-value farm ventures that can augment profits. The key to lifting the farm economy, therefore, lies in promoting integrated farming, with a judicious mix of main and allied enterprises. Since many of the supplementary pursuits have a gainful give-and-take relationship with farming, their integration can be expected to generate synergies that lead to higher marketable produce.

Where the main agricultural income is concerned, its rise depends chiefly on three factors: higher productivity, reduced costs and remunerative prices. The trend of a slump in farm prices in the wake of higher output – which was witnessed even after this year’s good kharif harvest – will, therefore, need to be curbed. This, in turn, will require radical reforms aimed at streamlining agricultural marketing, enhancing input use efficiency, ensuring greater value-addition and reduction of waste. Also needed will be more efficient post-harvest handling of perishable farm products. Creation of alternative employment and income opportunities in the rural sector will need special attention since farmers are becoming increasingly dependent on non-farm employment to supplement their incomes.