Mar 2, 2016

Hoping against hope. No signs of doubling farmers' income in the next five years




The average income a farmer gets from farming activities, including what he keeps for his family consumption at home, in 17 States of India is Rs 20,000 a year. In other words, the monthly income of a farmer in these States is a paltry Rs 1,666. 

Yes, you got it right. Rs 1,666 only. 

Now, put yourself in this picture frame. If you were a farmer and able to make only Rs 1,666 per month what would you like to do? Wait for another five years? Live on hope, thinking woh subah kabhi to aayegi ..

So when Finance Minister Arun Jaitley, while presenting the budget 2016, yesterday in Parliament said: “We need to think beyond 'food security' and give back to farmers a sense of 'income security'” I waited with an abated breath. But when all that he promised was to double farmers' income by 2022, still good five years away, all my hopes came tumbling down. 

Five years, the Finance Minister wants the farmers to wait. After five years, and even if the promise is realised, the income of farmers in these 17 States will go up to Rs 3,332 a month. I can imagine the Economic Survey, to be presented in 2022, proudly stating that because of the continuous efforts, the government has succeeded in doubling farmers income. Certainly, what an 'achievement' economists would say. But by that time, adjusting for inflation, even the Rs 3,332 would be equivalent to Rs 1,666 that a farmer is able to make now. 

This surely is a sense of 'income security' that the government has promised. 

At a time when agriculture is in deep crisis, with agrarian distress lomming large over the past several years, something that even the Economic Survey 2016 brings out quite in detail, I was expecting the government to perform an immediate surgical operation. Considerting that the spate of farmer suicides has jumped from the existing nationwide average of 42 a day, to 52 a day in 2015, agriculture required an urgent attention. Just mentioning agriculture some 50 times in the budget speech provides no succour to a sector which is languising in neglect and apathy. 

Prevailing farm crisis is not an outcome of low agricultural productivity. It is not as if the farmers do not know how to increase crop productivity as a reult of which his income continues to stagnate. Productivity is important but if it is not backed by remunerative price, a farmer will continue to suffer. Take the case of Punjab, India's frontline agricultural State. Punjab farmers produce 4,500 Kg/hecatre of wheat and 6,000 kg/hectare of paddy – a very high crop productivity indeed – in an area that has 99 per cent assured irrigation. All the development indices that the government is projecting in this year's budget , including expanding irrigation, are already existing in Punjab. And yet, according to the calculations of the Commission for Agricultuiral Costs and Prices (CACP) the net income from a hectare of cultivating wheat and paddy (the usual cropping pattern followed in a year) is about Rs 36,000, which comes to a monthly realisation of Rs 3,000 only. Compare this with the basic monthly salary of Rs 18,000 a chaprasi will get after the 7th pay Commission is implemented. I will not be surprised if a newly-appointed chaprasi also becomes eligible to pay income tax soon after he joins service. 

Economic Survey 2016 therefore is wrong when it says that the central challenge to Indian agriculture is low productivity. The primary challenge, let me make it clear, is what the Finance Minister spelled out, and rightly so, is – 'income security'. 

Talk of farmers income and mainline economists as well as the mainline media spare no effort to brand you a leftist. On several TV channels yesterday I was appaled to see how panelists were visibly disappointed even at the emphasis on the word 'agriculture' in the budget speech. What is not being understood is that agriculture has turned unviable not because it is unproductive or is not paying enough but has been deliberately kept impoverished all these years. Let me explain. In 1970, the minimum support price (MSP) for wheat that the farmers received was Rs 76 per quintal (100 Kgs)  In 2015, 45 years later, the MSP for wheat was raised to Rs 1,450 per quintal, an increase by 19 times. 

In the same period, the basic salary (plus Dearness Allowance) of government employees has gone up by 120-150 times; of college teachers and university propfessors by 150 to 170 times; of school teachers by 280 to 320 times; and of top executives of India Inc by a whopping 1,000 times. While the salaries of employees were raised phenomenally in the past 45 years, farmers were starved of their legitimate dues. If only the wheat price had been raised by the same yardstick, hiking it 100 times at least, the MSP for wheat should have been at least Rs 7,600 per quintal. The arguement is that if wheat prices go up, food inflational will skyrocket. It is therefore obvious that farmers had been penalised all these years merely to keep food inflation in control. 

This is the reason why the NDA government has backtracked on its promise of providing 50 per cent profit over the cost of production. Farmers income, seen through the hike in MSP, has only been raised by a nominal 3.2 to 3.6 per cent every year. So while every else in the organised sector gets a hefty pay hike, farmers are being deliberately ignored. 

I thought it was an appropriate moment for the government to make up for its 'anti-farmer' image. The enhanced public sector investment in agriculture has to be accompanied by steps that can boost farm income. If only the government had announced a Rs 3-lakh crore economic bailout package for the farming community, and followed it up by setting up a National Farmers Income Commission to ensure that farmers get a guaranteed monthly take home income package, the wheels of economic growth would have spiralled. More income into the hands of 60-crore farmers would have not only provided them with 'income security' but also created a huge domestic demand thereby leading to the revival of industrial growth. 

This in reality is the only prescription for Sabka Saath Sabka Vikas. #


Hopes Comes Crashing Down. Orissa Post. Mar 3, 2016
http://www.orissapost.com/epaper/020316/p8.htm

Don't Believe the Budget Hype, Farmers Have Been Short-Changed Again. The Wire. Mar 1, 2016 
http://thewire.in/2016/03/01/agriculture-sector-needs-more-than-just-income-security-for-farmers-23273/

जरूरी है किसानों की आय बढ़ाना Prabhat Khabar Mar 2, 2016
http://www.prabhatkhabar.com/news/big-story/story/733495.html

3 comments:

Narayana Rao said...

I think what you are writing is not right way of thinking. It is right when you say will real income double? People have to wait for five years. Yes the people of entire country have to wait after first putting efforts for every initiative of theirs. Any improvement is only going to be gradual from the present situation. It will come from the people olny. Higher level people can give certain direction and find opportunities. After people put in efforts nature has to cooperate.

Rajeev said...

Well argued case that India needs to take up drastic steps with a vengeance before it is too late.

Anonymous said...

JETLIJI NE JO ABHI KE BUDJET ME KRUSHI ME 100% FDI KO ANUMATI DI HAI. KYA YE HAMARE KISANO KO FAYDA DEGA YA PHIR DESH KA AUR KISANOKA NUKSAN HI KAREGA? HAMARI SARKAR DESH KI KHETI BHI BARBAD KARNE ME LAGI HAI KYA?