An enterprise to double farmers’ income: a paradigm shift
Dr Arabinda K Padhee
The ambitious goal set by the Prime Minister of India for doubling farmers’ income (DFI) by 2022 (75th year of Indian Independence) is a very welcome move. The most vital point of this initiative is that there is a paradigm shift in the agriculture policy space with increasing focus on ‘profitability’ rather than ‘productivity’ aspect of Indian farming.
The progress of Indian agriculture since independence has been quite impressive when we consider the period of severe food shortages in mid-1960s to the present level of near self-sufficiency in food grains. While there is a sharp decline in the share of agriculture in the GDP during this period, the dependence of population on agriculture and allied sectors for their livelihoods has not gone down in similar proportion.
Frequent occurrence of weather extremes in many parts of the country coupled with several issues relating to water scarcity, land degradation, credit burden, imperfect markets, non-remunerative prices for agricultural produce, etc. have resulted in a distress like situation for many farmers, particularly the small and marginal land holders.
In fact, Indian agriculture is facing several challenges in the era of a changing climate. Very small operational landholdings ( national average for all farm holding groups taken together is 1.15 hectares and the average for marginal farmers being as small as 0.39 ha) that is mostly dependent on the rain God (55% of the cultivated land being rainfed); poor soil health (actual NPK ratio being 7.2 : 2.9 : 1 against often prescribed 4:2:1); decreasing availability of irrigation water due to competing demands from industrial/domestic sectors and very low levels of value addition and food processing and fragmented marketing are typically considered as the reasons for poor returns on the farmers’ produce.
A crumbling agricultural extension system (admittedly, in a very dysfunctional state of affairs) makes the situation pretty worse.
In the last couple of years, the reports of Group of Secretaries of Government of India (2015 and 2016); Policy paper on Doubling Farmers’ Income of NITI Aayog (March, 2017) and that of the Committee on DFI of Ministry of Agriculture and Farmers’ Welfare (November, 2017) have outlined strategies and action plans to achieve the goals set by the Government. All these reports have outlined that to take Indian agriculture to the level of a profitable proposition; operations even at individual farm level have to be treated as a business enterprise.
The Prime Minister while laying down his vision on DFI articulated a seven points agenda that includes enhanced focus on irrigation with large scale investments with the aim of ‘per-drop, more crop’; availability of quality seeds and nutrients; large scale investments in warehousing, cold chain and storage facilities; value addition through food processing; risk management through crop insurance scheme; setting up of a national farm market ; and promoting ancillary activities like poultry, fisheries etc.
A good number of schemes like PMKSY (Pradhan Mantri Krishi Sinchayee Yojana); PMFBY (Pradhan Mantri Fasal Bima Yojana) ; SHC (Soil Health Card); NCU (Neem-coating of Urea); PKVY (Paramparagat Krishi Vikas Yojana) and e-NAM (electronic National Agriculture Market), etc. have since been launched and under implementation to achieve the goal of DFI. These actions of the Government have raised high expectations among everyone thinking for the welfare of farming communities in the country.
Studies have revealed that a compound annual growth rate (CAGR) of 10.4% would be needed to achieve the target on DFI (the present level of CAGR computed from 2002-03 to 2012-13 is only 3.5%). As per the NSSO (2013) data, average monthly income of an Indian farmer is about Rs.6500, of which majority (60%) comes from agriculture and animal husbandry activities and 32% and 8% from wages and non-farm income, respectively.
It is noteworthy that some Indian States like Karnataka, Rajasthan, Chhattisgarh, Gujarat, Jharkhand and Madhya Pradesh have made satisfactory average Agriculture-GDP growth in the range of 5.17-9.67 % (in ascending order) in last ten years (between 2005-06 to 2014-15 for which data are available; at factor cost in 2004-05 prices). Similarly, States like Tamil Nadu, Andhra Pradesh, Madhya Pradesh, Rajasthan, Haryana and Odisha have shown impressive real-CAGR growth in farmers’ income in the range of 5.4-8.3% (in ascending order) between 2002-03 and 2012-13.
It is therefore hoped that with a conducive policy environment coupled with good implementation of available schemes and programs can result in a positive farm/farmer income growth. Followings are few prioritized agenda items that Governments, both at the Center and States, could immediately adopt for achieving the goal of DFI.
Institutional and Governance Reforms:
Agriculture in India is a state subject and past experiences have shown that meaningful interventions by states could only make agriculture development visible. Public investments in the sector have also largely come from the states than the outlay by the Centre. Studies have now established that more and more subsidies on inputs or even loan waivers are not panacea for the alarming farm crisis.
Though targeted subsidies should continue to protect the vulnerable farmers, tools like Aadhaar and ICT could be well positioned for purposeful utilization of the scarce resources. Direct Benefit Transfer (DBT) of subsidies in seeds, fertilizers, farm machineries, etc. can not only plug leakages, but also ensure timely and efficient delivery. Unfortunately, populist schemes in few states distort the market scenario in the rest and create an unhealthy competition and clamor for such freebies. In many instances, they lead to environmental degradation beyond repair. All these critical issues could only be resolved if there is a consensus amongst the states and mediated by the Centre (as seen in the GST Council) in a complex political economy of India.
To bring all states on board for alignment to a broad framework and adoption of state/region specific strategies, it is suggested to convene an urgent meeting of the NITI Aayog or National Development Council (NDC) chaired by the Prime Minister with Chief Ministers and other members/experts in attendance. State Governments may hold similar meetings at the highest level with steering and implementation committees to achieve impressive agricultural growth. In fact, few State Governments have already put in place a separate Agriculture Budget and Cabinet sub-committee on agriculture.
Agricultural marketing (APMC) reforms have often been deliberated in policy circles for more than a decade now without a meaningful outcome as yet. Similarly, issues relating to land leasing/ tenancy have to be addressed with political will to see a transformational change in private investments (from the farmers/lessees/sharecroppers). In fact, a model land lease law has already been circulated by NITI Aayog for adoption by states. DBT, though successfully piloted for inputs like seeds, fertilizers, etc. is also yet to take off in spite of a promising IT backbone in terms of computerized land records and Aadhaar data base.
The research and development (R&D) infrastructure in agriculture sector in India is one of the largest in the world. Indian Council of Agricultural Research (ICAR) with its vast network of research institutions and the State Agriculture Universities (SAUs) constitute a huge National Agricultural Research and Extension System (NARES) which has the capacity to address the technology deficit. It is often suggested for a complete revitalization/re-strengthening of the NARES for efficient and effective delivery of their mandate, particularly the transfer of agri-technological innovations. The private sector must also play a vital role in the entire agriculture value chain including extension of technology to farmers.
With a population of 1.3 billion to be fed and more than half of them directly engaged in agriculture and allied activities, adaptation and mitigation strategies to address challenges of climate change have to be in the fore-font of the policy agenda. Unfortunately, the poor as well as small and marginal farmers are the most vulnerable to ecological pressures.
It is therefore imperative to design agricultural research agenda suiting to local crop ecology that would address needs of sustainable farm management in terms of soil, water, energy, genetic resources, etc. Fortunately, a very large gene pool is available for many crop species which has huge scope to develop new and more tolerant cultivars to multiple (both biotic and abiotic) stresses.
Scientific land and water management approaches like watersheds, conservation agriculture with precision farming machineries; systems of crop intensification, etc. have since gained acceptance in many parts of the country.
Technology options to cope with climate change impacts in agriculture sector have since been made available by NARES; CGIAR Institutes and other agencies for different regions. Safety net for farming communities, especially for smallholder farmers has to be designed with simple and affordable insurance products.
Food and Nutrition Security:
The latest Global Hunger Index (GHI) published by the International Food Policy Research Institute (IFPRI) places India at 100th position out of 119 countries in the list. The Nutrition Atlas recently released by National Institute of Nutrition (NIN) and Indian Council of Medical Research (ICMR) has highlighted that majority of Indian States have high percentage of malnourished children and high incidence of wasting. In such a scenario, nutritional security for the vulnerable sections of society has to be placed in the agenda for an inclusive growth. It is desirable therefore that Government must shift its focus from calorie intake towards nutrition. DFI initiative offers an opportunity to align policies in that direction.
Protein and nutri-dense crops such as pulses and millets fortunately are now gaining attention because of their low carbon and water foot-prints and climate resilience. Moreover, the consumer behavior and the dietary patterns are slowly changing over the past few years, at least in the health-conscious population, thus creating a congenial market for growers of these ‘smart crops’.
Government therefore should shift its ‘cereal-centric’ policy focus (through subsidized staples like rice and wheat) to a diversified mix that includes pulses and millets. A significantly higher production of pulses since last year must be sustained by procurement operations and price support mechanisms that will ensure profitability to the farmers. The DFI initiative at present offers the Government a suitable moment to prioritize agricultural research for generation of appropriate technologies that can improve pulse yields so as to compete with cereals.
Stable Farm Exports Policy:
India ranks second in the world in terms of agricultural production, next only to China. However, the export basket as yet has not reflected the huge crop diversity and a very significant farm trade surplus. Without an open and stable farm export policy, there is no ‘predictability’ for the farmers to access international markets and harness the best prices.
There is huge potential for promotion of agricultural export with ‘promising products’ like organic commodities. In fact, a number of crop varieties suiting to export demand are already available. Movement to high value crops (in protected cultivation wherever possible) can take care of both domestic and overseas markets. Peri-urban horticulture equally offers excellent scope with readymade markets in the nearby towns/cities.
Development and promotion of farm export clusters; compliance of international food-safety requirements; linking farmers to a scientific value/supply chain with supportive infrastructure ; doing away with multiple authorities monitoring/regulating agricultural trade, etc. can position Indian agriculture to global leadership stage. A spurt in agricultural exports from India can not only sustain the agricultural trade surplus round the year, but also stabilize prices of the commodities in domestic markets besides creating jobs in the entire value chain.
Scaling up a holistic and integrated value-chain approach:
There is an urgent need to integrate farm producers into modern value chains to potentially raise their income which is expected to ensure increased production along with minimizing risks from monsoon, middlemen and markets. Technologies suiting to respective agro-ecologies need to be put in place and demonstrated to the collectivized growers for mutual benefits. Processing and post-harvest infrastructures should be integrated to add value and quality to the produce. ICT for harnessing market intelligence would also minimize risks from the intermediaries as well as production uncertainties.
Digital agriculture as backbone for modern farming:
Use of ICT and data ecosystems has since been successfully tested for timely delivery of information (like crop, weather and price data) to make farming profitable and sustainable. Information on markets leads to better price discovery to the advantage of the producers by capturing a higher portion of the marketable value.
When scaled up, Digital Agriculture initiatives will require a robust Spatial (and temporal) Data Infrastructure for decision support to maximize farm profitability and reduce risks. Delivery of advisory services to progressive farmers through the digital means (leveraging social media platforms) can also take care of the inadequacies of traditional extension service delivery.
As India is well positioned to deliver the prioritized interventions through Aadhaar, the Spatial Data Infrastructure, once stabilized could ensure a robust monitoring and evaluation (M&E) system to track farmer incomes and implementation of various schemes/ programs and subsidy administration. Private agri-business agencies must become meaningful partners to make the idea sustainable.
Two years have elapsed since the Prime Minister gave the clarion call on DFI. There is not enough time to achieve the goals, if serious actions are not taken immediately. The entire Government machinery and all the actors must move onward with incredible urgency in this noble initiative that concerns half of Indian population directly, and the rest, indirectly.
(The author is an IAS officer having experience in agriculture policy for more than a decade, presently working as Director, Country Relations in ICRISAT. The views expressed in the article are his own. He can be contacted at email@example.com .)