Hyderabad: Agriculture across the country is in dire financial straits. The country's hugely successful agriculture sector, with the launch of the Green Revolution, is now swimming in the throes of adversity. It is well known that agricultural sector is the backbone of the country's economy.
Of the 130 crore people living in the country, about 87 crore of people are dependent on this sector for their livelihood.
By the time of independence, the share of agriculture, which accounted for 55% of Gross Domestic Product (GDP), had declined to 13% currently.
Today, more than 85% of the country's farmer community is filled with smallholder farm hands only. More than half of overall food grains produced in the country are being supplied by these small farmers.
Agriculture sector plays an important role in terms of providing food security, foreign exchange earnings through exports, obtaining raw materials for industry, increasing rural economy etc. Such a farming industry today is struck with so many problems due to which the life of a small farmer is being ruptured.
In spite of such a calamity, the Modi government at the Center is planning to double the farmer’s revenues by 2022-23. For achieving the same, a 7-point strategy has been devised by a committee set up by the center, under the leadership of Ashok Dalwai.
The annual average annual income of farmers registered in 2015-16 was Rs. 96,703 and the committee proposes on increasing it to Rs.1,92,694 by the end of year 2022-23, through introducing amicable policies for the farmer community. The committee headed by Ashok Dalwai suggested that there should be atleast a constant growth rate of 15% per year, if the proposed target of doubling the farmer revenue is to be realized by the government. This proves that the next two years should be considered a challenge for the center.
The shortage of rainfall during the past three years in the country has been indicative of a hopeless realization of the government goal. The centre has announced a 16-point plan in its latest budget to achieve its ambitious goals. However, none of the plans were allocated suitable budgetary funds that can help in the process of achievement of the same.
Deduction in allocations
Everybody thought that in today’s complex times, agriculture and rural development sectors would be better allocated to the budget than done in the past. Yet, the budget of 2020-21 brought about, a different scenario. It was hoped that the funds will be increased in the current budget for schemes involving a direct benefit transfer such as PM Kisan Yojana, Minimum Support Price etc., which are expected to increase the farmers income.
The committee suggested that if the income of farmers is to be doubled by 2022, an additional fund of Rs. 6.4 lakh crore is needed to be utilized upfront. But, the latest budget allocation surprised one and all by decreasing the funding instead of increasing the same, under these heads!! For example, agriculture and its allied sectors, such as irrigation have been allocated only Rs.1.58 lakh crores.
Previous year, this has been Rs.1.52 lakh crores, which indicated that the allocation increased by just Rs. 6 lakh crores. It is quite evident that with such a lowly increase, the income of the farmer cannot be expected to rise double. If the funds allocated for village development is added, it makes a total of Rs. 2.83 lakh crore which is about 9.3% of the total budget of Rs.30.4 lakh crores. This is about 9.83% of the total budget declared for the year 2019-20. This means that the centre has reduced funding by 0.5 per cent towards budgetary allocation for the improvement of rural economy.
During the last financial year, though the scheme of PM Kisan Yojana has been allocated a budget of Rs.75,000 crores, only about Rs.42,440 crores has been spent across 8.46 crores of families. This time again, during the budget sessions, the same amount of Rs.75,000 crores has been allocated. Across the country, there are about 14.5 crore farmers.
With an estimation of payment of Rs. 6,000 per farmer, there is a requirement of around Rs.87,000 crores to cater to the same, during this year. The centre is implementing a Market Intervention scheme at the request of State Governments to ensure that farmers do not suffer loss of perishable goods. There is also a support pricing scheme. Last year, around Rs.3,000 crores has been budgeted for both these schemes. However, this year, with a deduction of Rs.1000 crores, the same schemes were allocated Rs.2000 crores alone. It may be noted that in Andhra Pradesh itself, this year, it was budgeted for Rs.3000 crores.
Provision for the PM Asha Scheme introduced in 2018 for farmers who grow pulses and oilseeds have been shrunk to Rs.500 crores, which is an indication of the government's integrity towards the poor farmers. Also, in the year 2019, the PM Kisan Mas Dhan Yojana for elderly, marginalized and smallholder farmers will get a cut of Rs. 680 crores. It is surprising that only Rs.500 crores have been provisioned for setting up of around ten thousand farmer producer companies in the country and for their development. It is surprising that only Rs.500 crores has been allocated for these companies. Milk production is projected to double in the country by 2025. Andhra Pradesh has already topped the nation in milk production.
Around eight million families across the country are in this profession. The vast majority of these are mired in poverty. Yet, this sector is provisioned just Rs. 60 crores. Health care costs and provision of fodder for livestock have become costlier affair and the allotted amount is no longer enough for such purchases. At this rate, it is almost impossible to double the milk production.
A further deduction was implemented at the rate of 11% on fertilizers and 15% on the employment guarantee scheme. Allocations to the Food Corporation of India (FCI), which plays a key role in the process of grain procurement from farmers, have also been reduced. While in the previous year, the allocation for FCI was Rs.1,84,220 crore , this time it was limited to Rs.1,08,688 crore. That means Rs. 76,532 crore had been deducted in the allotment of the said funds. This causes farmers to sell their balance grains to private traders and millers at lower prices, as FCI will not be purchasing the same at higher rates. The market prices are usually lower than the minimum support price decided by the government, which results in the farmers selling their produce for huge losses.
Provision for employment guarantee scheme that was the main source of financial support for crores of villagers and daily-wagers is brought down to Rs.61,500 crores from Rs.71,000 crore. Last year, huge support was provided to Corporate companies in the form of tax waiver to the tune of Rs.1.45 lakh crore and has further waived off the arrears amounting to Rs.6.6 lakh crores, that were pending since 2014-15, However, farmer loans at the central and state level were waived off only to the tune of Rs.1.5 lakh crores.
Focus To Be Put on Price
Debt waiver of farmer loans has been taking place at the state and central levels despite which the state of affairs amongst the farmer community has not been improving at all. Governments need to give serious attention to the plight of agriculture in the face of farmers' lives.
Farmers are taking to roads with demand to get their problems solved. Just because farmers income rises, it does not mean that their lives improve. Their source of income/revenue needs to be consistently improved. The doubling of monetary receipts will not fetch them any profitability as long as the prices of commodities, fertilizers, pesticides and labor rates are also on the rise. The monetary increase should be such that it can match the real-time needs of the farmer and vice-versa. For the farmer, it is either way a big loss if the crop is less harvested or even harvested more than expected / needed. Increasing commodity supply into the market when the crop is high is likely to result in low demand-high supply theory.
This risk is even greater for crops that are easily perishable. In such times, the farmer will have no choice other than selling his produce at rock-bottom prices. Milk, onions, fish, tomatoes and vegetables fall into this category. The solution to this is to set up cold warehouses. The provision of cargo transportation via airplanes will be of more use to the owners, saving the lifetime of their perishable products.
Care should be taken to see that the farmers do not approach various financial sharks, middlemen and other private money lenders, for loans under high interest rates. This can be avoided if low interest loans are made available for them by the Government. On one hand, the center has been stating that it is working towards doubling the income of the farmer, and on the other hand it had decreased its share of the premium payment in the ‘Fasal Bhima’ scheme, thereby increasing the premium amount that the farmer has to pay for the scheme. It is high time that the Government realizes that such measures will only push the farmer, further into the debt pit and he becoming financially independent will remain a far-fetched dream.
Selection of the right crop is crucial
The atmosphere and geographical location of our country is suitable for planting many types of crops. Planting suitable crops will do much good for the farmer. The advice of scientists in this regard should be provided to the farmers. Despite cuts in funding, the center has taken many other steps to increase the income of the farmer.
During the tenure of 2014-19, around 40.45 lakh hectares of land was brought under the;Micro Irrigation. 585 mandis across the country were brought under one umbrella by the National Agriculture Market (e-NAM). Setting up of Local markets (Gramin Haats), supporting farmer organizations, increasing the minimum support price by 50%, widening the sphere of collection of pulses and oil seeds, distribution of around 22.07 crores of soil quality record cards that save at least 8 to 10 percent of the cost of production for farmers are a few examples of the various measures taken by the Government for the benefit of the farmer community. The government had further introduced many a scheme such as-
‘Fasal Bhima’ where the farmer pays a low premium while the rest of the premium is taken care of by the government;
increasing the limit and number of agriculture loans;
widening the sphere of Kisan Credit Card issuance and
the more recently introduced PM Kisan, under which the Direct Benefit Transfer (DBT) scheme is implemented and money is directly transferred to the beneficiary bank account;
These schemes are all aimed at making the farmer financially independent.
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