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Surinder Sud: Boost farm income, not production

Survey shows few farmers know and can benefit from minimum support prices

Surinder Sud 

Surinder Sud

Small and marginal farmers - the bulk of the Indian farm community - have not gained much from agricultural development, as has been highlighted by various surveys and reports from committees and commissions. The latest confirmation comes from the National Sample Survey Organisation (NSSO) through the 70th round of data gathered in 2012-13. The data indicate that these farmers remain poor, handicapped in terms of access to technology and institutional credit, and deprived of remunerative prices.

The data presented in the latest NSSO report on "the situation of agricultural households in India" put the average monthly income of Indian farmers at just around Rs 6,500. This is little different from what was estimated nearly a decade ago by the National Commission on Farmers, headed by the noted farm expert M S Swaminathan. At this level, farmers are worse off than even the lowest-paid employees in the government or organised sector.

Indeed, farming itself is not sufficient to ensure that small and marginal farmers earn a living. For over half marginal land-owning families it is wages earned through other employment that is the principal source of income. And for about a quarter of others, income from rearing livestock is a significant component of total income.

Clearly, the recent and prolonged spell of high prices for farm commodities may have kept food inflation in double digits, but it has not sufficiently benefitted farmers. This is partly explained by the wide disparity in prices paid by consumers and those received by producers.

What is even clearer is that the government's procurement and minimum support price (MSP) mechanism has failed to ensure remunerative prices to the growers. A far too low awareness about MSP - and lower realisation of these prices - among farmers could be one reason. Barring a small section of rice and wheat producers, most farmers are unable to sell their produce to government procurement agencies at MSP. Even for rice, according to NSSO numbers, only 13.5 per cent of paddy sellers got the MSP in the past two seasons. Little wonder, therefore, that farmers find it hard to survive with returns from crops alone.

Worryingly, the survey found that of over half of all the farmers are heavily indebted. As much as 40 per cent of their finance still comes from informal sources, despite an increase in the flow of institutional credit to agriculture in recent years. Usurious moneylenders, too, account for a 26 per cent share of the total agricultural credit.

A significant feature of farm indebtedness is that it is much higher in agriculturally progressive areas than in relatively backward ones. The NSSO reckons it at 93 per cent in Andhra Pradesh and 82.5 per cent in Tamil Nadu, as against 37 per cent in Chhattisgarh and 17.5 per cent in Assam.

Most farmers are unaware of the existing agricultural insurance schemes that can help them hedge their production and income risks. Over 95 per cent paddy farmers and 99 per cent wheat growers did not buy any insurance cover for their crops in the last two seasons.

The survey indicates that about 59 per cent of farmers do not get much technical assistance and know-how from government-funded farm research institutes or extension services. So, they have to rely on progressive farmers, media and private commercial agents such as dealers of farm inputs like seeds, fertilisers and pesticides, for technical information.

The NSSO conclusions broadly bear out the findings of an earlier countrywide survey of the "state of Indian farmers" conducted by the Centre for Study of Developing Societies (CSDS) and sponsored by the Bharat Krishak Samaj. That survey had found that farm incomes generally fell short of the livelihood needs of farm households, forcing a sizeable section of them to supplement their earnings by doing non-farm work. Nearly 67 per cent women had maintained that agricultural income was woefully insufficient to cover their household expenditure.

It is, therefore, imperative that government policies should aim at boosting farm income, not farm production alone. This can be done by facilitating cost reduction through higher productivity, and better returns through fair and transparent marketing.


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First Published: Mon, December 29 2014. 21:48 IST
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