Considering that nearly 50 per cent of the country is reeling under a serious drought, with June being one of the five hottest months in the past 100 years, and with growth in real farm incomes remaining almost ‘near zero’ in the past seven years, the Finance Minister Nirmala Sitharaman has a difficult task cut out when she presents her maiden budget on July 5. But expectations are riding high.
There is no denying that agriculture is in a desperate need for reforms but the bigger challenge for the new government will be on how to increase real farm incomes. Economic Survey 2016 had estimated the average income of a farm family in 17 States of India, which means roughly half the country, at a paltry Rs 20,000 a year, and with a major study conducted by OECD-ICRIER pegging the loss farmers suffered on account of being denied the rightful price, between the years 2000 and 2017, at a whopping Rs 45-lakh crores, farmers have been at the receiving end. As if this is not enough, recent studies show farm incomes plummeting to the lowest level in 15 years, and huge job losses for the rural farm and non-farm workers as well.
Farmers have toiled hard to produce bumper harvests. And yet, with each passing year, the plight of a farming family has only worsened. Agriculture in reality has been a victim of macroeconomic policies which aim at keeping food inflation low, provide cheaper raw material for the industry, and meet the obligations of international trade. While the terms of trade were against agriculture, public sector investment between 2011-12 and 2016-17 declined to 0.4% of the Gross Domestic Product (GDP). Private sector investment too dipped to 1.8% in the same period. With public and private sector investment on the decline, coming down to a low of 2.2% of the GDP in 2016-17, the neglect of agriculture was all too apparent.
There is hardly a day when farm suicides are not being reported from one part of the country or another. Take the case of Punjab, where even after the loan waiver of Rs 2-lakh per farmer was initiated in January 2018, as per Bhartiya Kisan Union calculations there have been 430 farm suicides reported in the year gone by. Between 2000 and 2017, a house-to-house survey by three public sector universities had calculated a total of 16,600 farm suicides. If such is the depressing farm scenario in the frontline agricultural state, the agrarian distress prevailing in the rest of the country can be easily imagined.
The launch of Prime Minister Kisan Samman Nidhi Yojna (PM-Kisan) in Feb 2019, which provides all landowning farmers with a meagre direct income support of Rs 6,000 a year, or Rs 500 per month, the government made its intent clear that it is keen to revive agriculture. It also is an indication of government’s willingness to provide direct income support. The scheme has been now extended to all 14.5-crore landowning farmers , and it now needs to be further extended to 14.4-crore landless farmers. Already a budget provision of Rs 87,000-crore has been made and to include another 14.4-crore landless farmers the total budgetary allocation would be around Rs 1.6- lakh crore. To the question where will the money come from, the best and easy instrument available for the Finance Minister is to immediately scrap the annual fiscal stimulus package of Rs 1.86-lakh crore being doled out to the industry, in operation since the global economic meltdown in 2008-09. There is no economic justification for the package. It continues to be paid for ten years now.
In 2018-19, farm credit to the tune of Rs 11.68-lakh crore was extended to agriculture. This may further be revised to Rs 12-lakh crore in this budget. But the bigger challenge remains on how to reach this to the small and marginal farmers. Economic & Political Weekly had recently estimated that not more than 15 per cent small farmers have access to institutional credit, and that’s the reason why farm loan waivers have not been able to stem farmer suicides. The task therefore should be on how to bring more farmers under the ambit of institutional credit. In addition, among the foundational reforms that the country is crying for the government should announce setting up of a National Commission for Farmers Income & Welfare with the mandate to provide every farming family with an assured income of Rs 18,000 per month. This should be provided by way of top-up approach over the average income that farmers get in each district. That data for this is available.
Expanding the network of Agricultural Produce Market Committee (APMC) regulated markets, from the existing 7,000 mandisto a probable target of 42,000 mandisin 5 kms radius, should be accorded top priority. This should be accompanied with a budgetary provision for setting up grain silos and warehouses across the country. Since the BJP manifesto had committed to provide Rs 25-lakh crore of investment in agriculture in the next 5 years, a beginning should be made by investing at least Rs 5-lakh crore this year on setting up mandis and godowns.
But more importantly, much of the problems farmers confront are related to governance. Like the ease of doing business for the industry, agriculture too needs Ease of Doing Farming initiatives to remove the hurdles and bottlenecks farmers encounter during cultivation, harvesting and marketing operations. Nirmala Sitharaman would appreciate this much better because it was during her tenure as Commerce Minister that 7,000 steps for ease of doing business were laid out. I wonder why she can’t unroll a mechanism to provide 5,000 steps for Ease of Doing Farming. #
0 comments:
Post a Comment