Devinder Sharma
Another year passes by. While there were a lot of expectations for a better future for farmers, but as 2019 fades into history, the farming community is still grappling to recover the cost of cultivation. With prices dropping across the spectrum, barring a few crops where assured procurement takes place, farmers incurred massive losses. With agriculture is crisis, the farm labour too had to bear the brunt. Farm wages had prevailed at a five-year low.
Also Read
For almost two decades now real farm incomes have been on the decline. The depressing trend continued in 2019 as well, and when nearly 42 per cent of the country was reeling under a severe drought in April, spanning across Andhra Pradesh, Karnataka, Maharashtra, Gujarat, Jharkhand, Bihar and parts of Northeast, Rajasthan, Tamil Nadu and Telengana, I thought the plight of farmers undergoing a severe drought at the time of Lok Sabha elections would dominate the electoral campaigns. Except for some mention in Maharashtra, Karnataka, and Telengana, the worsening agrarian crisis failed to evoke a political response.
The raging drought was followed by an erratic monsoon causing huge crop damage in Karnataka, Maharashtra, Kerala and parts of Madhya Pradesh. So much so that after three years of continuous drought, torrential rains that lashed Marathwada region of Maharashtra in August were termed as ‘wet drought’. And yet, foodgrain production jumped to 281.37 million tonnes in 2018-19, showing an increase of 15.63 million tonnes over the average production achieved in the preceding five years (2013-14 to 2017-18). However, in an era of record harvests, the gain in foodgrain production failed to translate into higher income for farmers. According to Niti Aayog, growth in real farm incomes has been ‘near zero’ in the past two years, and prior to that in the five year period between 2011-12 to 2015-16 real farm income growth had hovered at less than half a percent every year.
This has been the travesty of Indian agriculture clearly pointing to a perennial neglect of farming. Somehow agriculture continues to be seen as a non-economic activity which somehow has to be sustained by pumping in subsidies. With dominant economic thinking aimed at pushing a large section of the population from the rural to the urban areas, which are in need of cheap labour, the neglect of agriculture is a natural outcome of flawed economics. After all, with public sector investment in agriculture, between 2011-12 and 2017-18, remaining at 0.3 to 0.4 per cent of the GDP, and with nearly 50 per cent population engaged in agriculture, the reasons for the continued neglect becomes all too apparent.
Unfortunately, what is not being realised is that with unemployment rising to a 45-year high, and the economy on a slowdown spiral, strengthening agriculture is the only way to improve rural spending thereby creating more demand, which in turn will drive the wheels of the national economy. If only farmers could earn a profit from every crop they harvest, the face of agriculture will change for the better, forever. And once agriculture becomes profitable, it will see a reverse migration from the cities to the villages, and will end up absorbing a large proportion of unemployed youth. As I have often reiterated agriculture alone holds the potential to reboot the sagging Indian economy.
The continued decline in farm incomes over the past two decades was reflected in a leaked consumption expenditure survey report for 2017-18 – which has been shelved by the government – showing an average rural household spending on food to be at a paltry Rs 580 per month, roughly Rs 19 a day. Seen in conjecture with the findings of the Global Hunger Index 2019 which ranks India at 102nd position among 117 countries, and considering that 600 million people are dependent on agriculture, it becomes easier to draw a link between falling farm incomes, declining household food consumption and the worrying levels of hunger. The challenge, therefore, is to increase rural household consumption, which depends on focusing on income generation at the farm and non-farm level in rural areas.
In the interim Budget 2019, an effort was made to provide direct income support to agriculture to partly offset the losses farmers have been suffering, something that I have been asking for over the years. Under the PM-Kisan Samman Nidhi scheme a provision was made for providing Rs 6,000 per year for every land owning farmers. With an additional Budget provision of Rs 75,000-crore, it resulted in 141 per cent rise over the allocation of Rs 57,600-crore for agriculture in the 2018-19 Budget. While this translates to a miniscule support of Rs 500 per month, it is in reality a tectonic shift in policy planning, moving from ‘price policy’ to ‘income policy’ support in agriculture.
Instead of providing a slew of booster doses for the industry to prop up the economy in downturn, which includes Rs 1.45-lakh crore corporate tax concessions, Rs 75,000-crore for bank recapitalisation and a stimulus package of `25,000-crore to real estate, what can really spur demand is to provide more money into the hands of poor. This is only possible if the focus shifts to bolstering PM-Kisan and MNREGA as the two policy interventions that can make a difference. My suggestion would be to provide for an economic stimulus package of Rs 1.50-lakh crore under the PM-Kisan scheme which would ensure that the direct income support for farmers rises to Rs 18,000 per year or Rs 1,500 per month. In addition, the PM-Kisan scheme needs to be expanded in such a manner so as to bring the estimated 40 per cent tenant farmers in its fold. Spruce it with an extra allocation for MNREGA, at the same time ensuring its effective implementation, and the stimulus would shift to those who actually need it.
This has to be accompanied by a series of reforms in agriculture and rural development, and the country will see resurgence in rural spending thereby reinvigorating the economy. Tax cuts for corporate can wait, but the poor cannot.
