Farmers in India are anxiously waiting for the result of 2019 Lok Sabha polls to be announced on May 23. Irrespective of whether the present BJP-led NDA government retains power or a new coalition comes in power, there may be some changes in the farm policies, which would affect farm growth as well as farmer’s wellbeing. Let us analyse some of the expected changes and also the agenda for needed reforms to transform India’s farm economy for farmers’ wellbeing.
First, the election manifestos of both BJP and the Congress for 2019 have made several promises for the farm sector. The important promises made in the Sankalp Patra of BJP include (i) extension of existing PM Kisan Samman Nidhi yojana to all farmers, (ii) pension for small and marginal farmers on reaching 60 years of age (iii) interest free short term loans up to Rs 1 lakh at zero interest rate on the condition of prompt repayment of the principal amount, (iv) expanding irrigation in mission mode and completing 68 pending irrigation projects by December 2019, (v) creation of 10,000 new farmer producer organisations by 2022, (vi) setting up mechanisms of direct marketing of vegetables, fruits, dairy and fisheries and (vii) using artificial intelligence for more productive and profitable precision agriculture. These are achievable within a reasonable timeframe.
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The election manifesto of Congress also makes some promises such as (i) minimum income guarantee of Rs 6,000 per month (Nyay), (ii) freedom from indebtedness, (iii) replacement of the Commission for agricultural costs and prices (CACP) by National Commission on Agricultural Development and Planning, (iv) establishment of a commission on marginal farmers and agriculture labourers, (v) repealing the agricultural Produce Marketing Committees Act, (vi) establishment of farmers’ markets and (vii) formulating a policy to enable the construction of modern warehouses, cold storage and food processing facilities in every block of the country.
Besides, there are some common promises made by both BJP and INC, such as digitalisation of land record, promotion of FPOs, improvement in the crop insurance scheme and agricultural diversification. While these promises will form the basis for farmers’ demand in the coming years, there will be a need for some structural reforms to ensure accelerated and sustainable agricultural growth.
First, small farmers will start demanding not just Rs 6,000 a year under the existing PM Kisan, but Rs 6,000 a month under Nyay. Second, farmers will seek Karz Mukti or freedom from indebtedness including loans taken from both institutional and non-institutional sources. Third, if repealing the APMC Act is so easy, why various governments could not do it in the past. Fourth, the construction of warehouses, cold storage and processing facilities is considered crucial for accelerated and diversified agricultural growth.
Fifth, the new government has to address structural and policy reform issues. The key reasons for farmers’ distress are frequent crop loss due to nature calamities and market failure, resulting in low output prices, negative returns and rising debt burden of farmers. Therefore, the new government should work on de-risking agriculture by (a) designing and implementing a comprehensive farm income insurance policy, covering both weather and price risks in all farm products and (b) increased R&D support for climate-resilient agriculture and (c) incentivising farmers for carbon sequestration and climate change adaptation. The proposed farm income insurance policy would do away with the existing crop insurance and MSP policies and also PM Kisan or Nyay, the sustainability of which are in doubt without affecting investment in infrastructure and other areas.
Sixth, it needs to be understood that traditional agriculture cannot bear the burden of so much population. Presently the agriculture sector contributes hardly 15 to 16% to the country’s GDP but shares nearly 50% of the workforce. This is one of the main reasons for high incidence of poverty and indebtedness among agriculture households.
Hence the government must create enabling pull and push factors for the farmers to exit from agriculture by way of creation of increased rural non-farm employment and legalization of agricultural land leasing, as proposed in NITI Aayog’s Model Agricultural Land Leasing Act, 2016. The legalization of land leasing will motivate many farmers to leave agriculture and invest in rural non-farm development. It will help tenant farmers to access institutional credit, insurance and other support services for increasing their incomes.
Seventh, all farmers in all regions should be motivated to form autonomous, co-operatives and producers organizations to benefit from economies of scale and market had growth. Eighth, implementation of Forest Rights Act, 2006 would be crucial for improving the livelihood and incomes of tribal farmers and other forest dwellers and also for carbon sequestration and climate change adaptation.To conclude, there is a need for an integrated support system and policy reforms for reducing farmers’ distress and accelerating agricultural growth in inclusive and sustainable manners.