Budget 2020

Farm moves skirt issue of ‘agrarian distress’

N Madhavan Chennai | Updated on February 01, 2019 Published on February 01, 2019

It is clear that the Indian polity is bereft of ideas to deal with farm distress.   -  File photo

Income support scheme could lead to fragmentation of land holdings

Staring at an unprecedented rural distress situation that could cost it dearly in the upcoming elections, the Narendra Modi government has attempted to win over 12 crore farmers (each holding less than 2 hectares of land) and their families by giving them ₹6,000 per annum as income support. It has set aside ₹75,000 crore in the Interim Budget – an allocation large enough to blow its fiscal deficit target. But will the PM Kisan Samman Nidhi (PMKSN) help farmers lead a more respectable life?

Recently, Vijoo Krishnan, the Joint Secretary of All India Kisan Samaj, compared loan waivers to “pallative care” — which gives some immediate relief, but does not solve long-term problems. PMKSN does even less. While it may not destroy the credit culture in the way that loan waivers do, it runs the risk of further breaking up land-holdings as desperate farmers seek to become eligible for PMKSN. This is notwithstanding the fact that distributing ₹6,000, that too in three instalments, will not help farmers deal with the high indebtedness that compels them at times to take their lives.

It is clear that the Indian polity is bereft of ideas to deal with farm distress. The Congress has latched on to loan waiver as a solution, while the BJP has opted for direct monetary support to the farmers. Both have chosen myopic routes for electoral gains, rather than solving the problems permanently.

A farmer is indebted because his productivity is low and, to make matters worse, he gets a poor price for whatever he manages to produce. Any solution that does not deal with the twin issues is, at best, superficial. A government with vision would rather announce mega irrigation projects that will bring the predominantly rain-fed lands under irrigation. It will cost a lot of money, but the government can find the resources by diverting funds from unproductive subsidies. After all, it managed to find ₹75,000 crore for PMKSN.

The second reason for low productivity is the primitive agricultural practices, right from land preparation to post-harvest activities. The government should push farmers to modernise their farming by offering necessary incentives — be it embracing precision farming or adopting farm mechanisation. These incentives can be revenue-neutral as they can replace product-based subsidies that are currently given for inputs. Studies have shown that precision farming can cut input costs by 20 per cent and raise yields, for instance, by as much as 100 per cent for sugarcane, fruits and vegetables.

The attempt to improve farm incomes through higher minimum statutory price (MSP) has failed to work as it does not reach all farmers. It also distorts the market and fuels food inflation. eNAM, a platform created by this government to ensure better realisation for farmers, should be improved and rolled out nationally. Rome was not built in a day, and reforming Indian agriculture takes vision, time and resources. The sooner the policy makers realise this, the better for the farmers.

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Published on February 01, 2019
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