Room for growth: Economic Survey lists out hits and misses in the agri sector

The government has taken several initiatives to boost the income of farmers such as offering direct income support, helping farmers diversify into horticulture and allied activities, offering crop insurance and cheaper loans. Even the recent Millets 2023 scheme to mark the international year of millets is a way to boost farm incomes since millets enhance productivity. But has the lofty promise of doubling farmers’ income been fulfilled? The Economic Survey 2022-23, which was tabled in the Lok Sabha on January 31, elaborates on all the steps taken by the government to boost farmers’ income but does not quantify the increase.

The goal of doubling farmers’ income has already missed the 2022 deadline set by Prime Minister Narendra Modi in his Independence Day speech in 2017. This is especially true for those states where household agricultural income has declined instead of rising, as per government data. A parliamentary standing committee reiterated last month that the government is far from the goal of doubling farmers’ income. The panel has said in a report tabled in the winter session of Parliament that the monthly agricultural household income on an all-India basis rose from Rs 8,059 in 2015-16 to Rs 10,218 in 2018-19.

But in states like Jharkhand, Madhya Pradesh, Nagaland and Odisha, agricultural household income has declined instead of rising.

“...in four years (farmers’ income) in Jharkhand has come down from Rs 7068 to Rs. 4895, for Madhya Pradesh it has come down from Rs. 9740 to Rs. 8339, for Nagaland it has come down from Rs. 11428 to Rs. 9877, for Odisha it has come down from Rs. 5274 to Rs. 5112,”, the Standing Committee on Agriculture, Animal Husbandry and Food Processing noted in its 46th report.

The interventions listed out by the survey are in line with the recommendations of the Committee on Doubling Farmers' Income, which had identified improvement in crop and livestock productivity, diversification towards higher value crops, better resource efficiency, enhanced cropping intensity, improvement in real prices received by farmers and shifting from farm to non-farm occupations as being significant sources of growth. Several policy measures, such as the minimum support price (MSP) to secure the price at one-and-a-half times the all-India weighted average cost of production, schemes and price measures to focus on high-value-added crops such as oilseeds, incentives for crop diversification through price policy measures, improvements in agricultural marketing and by enhancing resource use efficiency, etc., have been adopted.

Income Support: The survey points out that 11.3 crore farmers received income support from the government under the April-July 2022-23 cycle of PM KISAN (Pradhan Mantri Kisan Samman Nidhi). Over the past three years, this scheme has provided assistance worth more than Rs 2 lakh crore to needy farmers. Farmers are given Rs 6,000 each year in three equal instalments, which works out to just Rs 500 a month. Sector experts have said earlier that the amount is too little to make any noticeable difference in farmers’ incomes. But the survey quotes an empirical study by the Indian Council of Agriculture Research (ICAR) and the International Food Policy Research Institute (IFPRI) to assert that PM KISAN has helped address the liquidity constraints of farmers for buying agricultural inputs, and especially helped small and marginal farmers to meet their daily consumption, education, health and other incidental expenses.

Crop insurance: The Pradhan Mantri Fasal Bima Yojana has been averaging 5.5 crore applications every year and in the last six years of its implementation, earned a combined premium of ₹25,186 crore but received claims amounting to ₹1.2 lakh crore (as of October 31, 2022). The survey points out that the acceptability of the scheme among farmers can be ascertained from the fact that the share of non-loanee, marginalised and small farmers have increased by 282 per cent since the scheme’s inception in 2016.

MSP: The government has been increasing the MSP for all 22 kharif, rabi and other commercial crops with a margin of at least 50 percent over the all-India weighted average cost of production since the agricultural year 2018-19, says the survey. Relatively higher MSP was given to pulses and oilseeds in order to keep pace with the changing dietary patterns and achieve the goal of self-sufficiency.

Agri credit: The highest agricultural credit flow since the National Democratic Alliance government came to power at the Centre was seen in FY22 at Rs 18.6 lakh crore. And the target for FY23 has been at Rs 18.5 lakh crore. The survey suggests that the government has been able to surpass the agri credit target it has set for itself each year because it ensured “hassle-free” credit availability at competitive interest rates. There is also the Kisan Credit Card (KCC) scheme that provides credit at any time, and the Modified Interest Subvention Scheme which provides short-term agricultural loan up to Rs 3 lakh at subsidised interest rates. KCCs have been issued to 3.89 crore eligible farmers with a limit of Rs 4,51,672 crore as of December 2022.

Agriculture growth: While India has been witnessing record foodgrain production for successive years, climate change has begun to adversely affect agriculture. The survey notes that in 2022, an early heat wave adversely affected wheat production and mentioned a decline in the sown area for paddy cultivation (3.8 lakh hectares less in kharif 2022-23 vs 2021-22) due to monsoon vagaries. While the rabi paddy sowing has grown, increasing climate action poses perhaps the biggest risk to farmers’ incomes.