|Demand of the question
Introduction. Contextual introduction.
Body. Discuss various challenges in realisation of the objective of doubling farmers’ income.
Conclusion. Way forward.
Agriculture plays an important role in Indian economy. Agriculture and its allied sectors still remain an important sector because of its continued role in employment (about 48%), income and most importantly in national food security. As agriculture supports the majority of Indian population and with government efforts to double farmer’s income it is imperative to deal with the challenges of agriculture and allied sectors.
Challenges in realisation of the objective of doubling farmers’ income:
- Availability of institutional credit: The realisation of the objective of doubling farmer’s income need to overcome the challenge of access to institutional credit. Non-institutional credit to agriculture is around 40%, which not only has exorbitant interest rates but also is exploitative resulting in reduced farm incomes and increased farmer suicides
- Insurance coverage: Farmers in India are exposed to large agriculture risks due to vagaries of nature. Unfortunately, less than 24% of the gross cropped area (against a target of 40%) is covered under Pradhan Mantri Fasal Bima Yojana leaving the rest farmers vulnerable to farm risks.
- Irrigation: Agriculture in India even today continues to be vulnerable to the vagaries of weather. As per economic survey, around 52% of the farm area is still unirrigated and dependent on rainfall. In India Ultimate Irrigation Potential is 139.9 million hectares but irrigation potential utilized is 80 million hectares.
- Investment in agriculture: One of the reasons for low growth is low investment. Starting with the National Agriculture Policy of 2000, efforts have been made to improve investment, particularly private investment. But the official data shows that between FY12 and FY17 the public investment remained more or less static at 0.3-0.4% of the GDP while private investment fell from 2.7% to 1.8%.
- Seed availability: Good quality seeds are out of the reach of small and marginal farmers. High cost of hybrid as well as genetically modified seeds especially with respect to the seeds of commercial crops is an issue.
- Land fragmentation: There is prevalence of small and marginal farmers, less consolidation of landholdings etc. that lead to land fragmentation. This makes farmers go for subsistence agriculture and it is also difficult for mechanisation.
- Farm mechanisation: There is also a need to address the issue of lower farm mechanisation in India which is only about 40% as compared to about 60 per cent in China and around 75% in Brazil.
- Irrigation facilities: The coverage of irrigation facilities needs to be extended while ensuring an effective water conservation mechanism. Integrated watershed management should be factored in agriculture related policy for enhanced water use efficiency and soil management.
- Credit: An inclusive approach to provision for agricultural credit has to be undertaken to address the issue of skewness in its regional distribution.
- Boosting allied sector: Allied sectors such as animal husbandry, dairying and fisheries sectors need to be given a boost to provide an assured secondary source of employment and income especially for the small and marginal farmers.
- Increasing coverage: Coverage of the food processing sector needs to be scaled up to create an additional source of market for agricultural commodities.
- Land reforms: As the proportion of small and marginal holdings is significantly large, land reform measures like freeing up land markets can help farmers in improving their income.
- Mechanisation: Small holdings of India can be better harnessed through appropriate use of farm mechanisation as the degree of farm mechanisation is low as compared to the other major developing countries like Brazil and China.
- Income support: While Government measures are in operation aimed at improving productivity and its marketing, efforts of farmers need to be supplemented with better coverage of direct income/investment support.
- Focus on global markets: There is a need to give increased focus on exploring global markets for agricultural commodities to give an additional source of market for the surplus of agricultural produce India currently has.
Farmers are in a low income trap and need policy measures. Linking procurement to minimum wage, general inflation will enable elimination of agrarian distress. These measures will benefit the farmers and would enhance their income.