How to Double farmers’ income by 2022?

Agriculture is a State subject and the State Governments undertake implementation of programs/schemes for the development of the sector. Government of India supplements the efforts of the State Governments through various schemes/ programs which are meant for the welfare of farmers by:

• increasing production, 
• remunerative returns 
• income support to farmers

PM Modi's dream is to Double farmers’ income by 2022 and that farmers should realise their contribution in the mainstream development but how?

Topics Covered:

1) Problems faced by farmers

2) Solution to the problems faced by farmers

3) Three Pillars for doubling farmers income

4) Steps taken by Government for Doubling Farmer's Income - various schemes, policies, funds

5) Major sources of growth in agricultural sector

Problems faced by farmers:

The main problems faced by farmers are:

i) Farmers have not been getting the corresponding increase in remuneration.

ii) Post-harvest losses due to either bumper production leading to a glut and abrupt price fall or due to incidences of less production resulting in the availability of meagre marketable surplus.

Solution to the problems faced by farmers

The solution to these problems is three-fold:

i) Adoption of cost effective production and diversifying agriculture towards growing of high-value crops,  agro-forestry, rearing of livestock, poultry, fisheries, etc.

ii) Creating accessible and efficient markets to ensure better price realization to the farmers through a robust value supply chain.

iii) Formulated farmer welfare centric programs and policies, which are related to deal with problems of  food security and price security.  

Three Pillars for doubling farmers income

The three important pillars to achieve the dream of doubling farmer's income by 2022 are:

• Production Cost
• Diversify agricultural activities
• Regulated market

1) Production Cost

• cost of production should be reduced and productivity should be increased. 

2) Diversify agricultural activities

• farmers need to diversify and adopt other agricultural activities such as animal husbandry, poultry, goat rearing, bee keeping, and timber plantation. 

3) Regulated market

• farmers get regulated markets close to their farms to sell their produce and earn profitable returns. 

Steps taken by Government for Doubling Farmer's Income

1) Doubling Farmer's Income Committee (DFI Committee)

• Formed on: April 2016
• Submitted Report: September 2018

The Government of India constituted an Inter-ministerial Committee in April, 2016 to examine issues relating to “Doubling of Farmers Income” (DFI) and recommend strategies to achieve the same. 

The Committee submitted its Report to the Government in September, 2018 containing the strategy for doubling of farmers’ income by the year 2022.  

The DFI strategy as recommended by the Committee include 7 sources of income growth viz., 

(i) improvement in crop productivity; 

(ii) improvement in livestock productivity; 

(iii) resource use efficiency or savings in the cost of production; 

(iv) increase in the cropping intensity; 

(v) diversification towards high value crops; 

(vi) improvement in real prices received by farmers; and 

(vii) shift from farm to non-farm occupations.

After acceptance of the DFI Committee recommendations, the Government has constituted an ‘Empowered Body’ to review and monitor the progress.

2) List of various interventions and schemes launched for the benefit of farmers

The Government has adopted several developmental programmes, schemes, reforms and policies that focus on higher incomes for the farmers. All these policies & programmes are being supported by: 

• higher budgetary allocations, 
• non-budgetary financial resources by way of creating Corpus Funds, and 
• supplementary income transfers under PM-KISAN. 

Various schemes launched by Government of India to convert the dream of "doubling farmer's income by 2022" into reality are:

1. Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)
2. Pradhan Mantri Kisan MaanDhan Yojana (PM-KMY)
3. Soil Health Card (SHC)
4. Pradhan Mantri Krishi Sinchai Yojna (PM-KSY)
5. Paramparagat Krishi Vikas Yojna
6. Pradhan Mantri Fasal Bima Yojna (PM-FBY)
7. Neam Coated Urea
8. Har Medh Par Ped
9. Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA)
10. Mission for Integrated Development of Horticulture (MIDH)
11. Interest Subvention Scheme 2018-19
12. Kisan Credit Card

MARKET REFORMS

1. National Agricultural Markets (e-NAM)
2. Agricultural Produce Market Committee (APMC) Act
3. Model Agriculture Produce and Livestock Marketing (Promotion and Facilitation) Act, 2017 [Model APLMC (Promotion & Facilitation) Act, 2017]
4. Establishment of 22,000 number of Gramin Agriculture Markets (GrAMs) as aggregation platforms
5. Agri-Export Policy, that targets to double agri-exports by 2022
6. The Farmers Produce Trade and Commerce (Promotion & Facilitation) Ordinance, 2020
7. The Farmers (Empowerment & Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020
8. Amendments to Essential Commodities Act, 1955, that deregulates various agri-commodities
9. Promotion of 10,000 FPOs by 2024

Creation of Corpus Funds

1. Micro Irrigation Fund – Rs. 5,000 crore
2. Agri-marketing Fund to strengthen eNAM and GrAMs – Rs. 2,000 crore
3. Agricultural Infrastructure Fund (AIF) to build agri-logistics (backward & forward linkages) – Rs. 1 lakh crore

Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)

1) Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) is a Central Sector Scheme launched by Government of India:

• To provide income support to all farmers’ families across the country, 
• To enable them to take care of expenses related to agriculture and allied activities as well as domestic needs

2) The scheme aims to provide a payment of Rs. 6000/- per year, in three 4-monthly installments of Rs. 2000/- to the farmers families, subject to certain exclusions relating to higher income groups. 

Pradhan Mantri Kisan MaanDhan Yojana (PM-KMY)

1) Pradhan Mantri Kisan MaanDhan Yojana (PM-KMY) is a Central Sector Scheme which aims to provide social security net for Small and Marginal Farmers (SMF) as they have minimal or no savings to provide for old age and to support them in the event of consequent loss of livelihood

2) Pradhan Mantri Kisan MaanDhan Yojana (PM-KMY) will provide old age pension to Small and Marginal Farmers. 

3) Under this Scheme, a minimum fixed pension of Rs. 3000/- will be provided to the eligible small and marginal farmers, subject to certain exclusion clauses, on attaining the age of 60 years. 

 Soil Health Card (SHC) Scheme 

1) Soil Health Card scheme is a flagship scheme of the Government to promote the use of fertilizers based on analysis of Soil Health and enable farmers to get maximum yields at lower cost with minimum damage to the ecosystem. It will help to rationalize usage of fertilizers.

2) Soil Health Card scheme was launched in February 2015 to provide Soil Health Cards (SHC) to more than 12 crore farmers once every 2 years.

3) Soil Health Card provides nutrient status of soil to farmers and recommend appropriate dosage of nutrients and fertilizers to be applied for improving the health and fertility of the soil.

4) The appropriate application of nutrients or fertilizers help in:

• increasing the productivity of the crop
• reducing the cost of production or cultivation
• minimizing damage to the environment
• promote soil management practices and restore soil fertility

 

5) The soil samples are tested on 12 parameters which includes:

• major nutrients (N, P, K), 
• secondary nutrients (S),  
• micro-nutrients (Fe, Zn, Cu, Mn, B) and 
• others (pH, EC, OC) 

6) The first cycle (2015-17) of the scheme is expected to be completed by July 2017.

So far 9 crore soil health cards have been distributed to farmers. [as of July 2017]

7) Gujrat was the first state to issue Soil Health Cards in 2003-04.

Pradhan Mantri Krishi Sinchai Yojna 

• increase area under irrigation (Har Khet Ko Pani), 

• encourage efficient use of water by reducing wastage, 

• Per drop more crop initiative

      Drip/sprinkler irrigation is being encouraged for: 

1. optimal utilization of water, 
2. reducing cost of inputs and increasing productivity.

• Enhance recharge of aquifers.

• PMKSY not only focuses on creating sources for assured irrigation, but also creating protective irrigation by harnessing rain water at micro level through ‘Jal Sanchay’ and ‘Jal Sinchan’. 

Paramparagat Krishi Vikas Yojna

• promoting use of organic manure

Pradhan Mantri Fasal Bima Yojna 

1) Pradhan Mantri Fasal Bima Yojana (PMFBY) is a crop insurance scheme launched from Kharif 2016 season. It aims to provide better insurance coverage to crops for risk mitigation.

2) This scheme provides insurance cover for all stages of the crop cycle including post-harvest risks in specified instances, with low premium contribution by farmers.

• crop insurance scheme insuring crops against pest attack, natural calamities and diseases. 

[Read more: Pradhan Mantri Fasal Bima Yojana or Crop Insurance scheme]

Neem Coated Urea (NCU)

a) Scheme being promoted to:

• regulate use of urea, 
• enhance availability of nitrogen to the crop and 
• reduce cost of fertilizer application.  

b) Neem Coated Urea slows down the release of fertilizer and makes it available to the crop in an effective manner. 

The entire quantity of domestically manufactured and imported urea is now neem coated. 

c) It helps to save about 10% of urea consumption, thereby resulting in reduced cost of cultivation and improved soil health management.

Har Medh Par Ped

1) Under “Har Medh Par Ped”, agro forestry is being promoted for additional income.  

2) With the amendment of Indian Forest Act, 1927, Bamboo has been removed from the definition of trees. 

A restructured National Bamboo Mission has been launched in the year 2018 to promote bamboo plantation on non forest government as well as private land and emphasis on value addition, product development and  markets.

Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA)

1) Giving a major boost to the pro-farmer initiatives, the Government has approved a new Umbrella Scheme ‘Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA)’.  

2) The Scheme is aimed at ensuring remunerative prices to the farmers for their produce as announced in the Union Budget for 2018. 

This is an unprecedented step taken by Govt. of India to protect the farmers’ income which is expected to go a long way towards the welfare of farmers.

Mission for Integrated Development of Horticulture (MIDH)

1) Bee keeping has been promoted under Mission for Integrated Development of Horticulture (MIDH) to increase the productivity of crops through pollination and increase the honey production as an additional source of income of farmers.

Interest Subvention Scheme 2018-19

1) To ensure flow of adequate credit, Government sets annual target for the flow of credit to the agriculture sector, Banks have been consistently surpassing the annual target. The agriculture credit flow target was set at Rs. 13.50 lakh crore for the F.Y.2019-20 and Rs.15.00 lakh crore for F.Y. 2020-21.

2) Extending the reach of institutional credit to more and more farmers is priority area of the Government and to achieve this goal, the Government provides interest subvention of 2% on short-term crop loans up to Rs.3.00 lakh. Presently, loan is available to farmers at an interest rate of 4% per annum on prompt repayment.

3) Further, under Interest Subvention Scheme 2018-19, in order to provide relief to the farmers on occurrence of natural calamities, the interest subvention of 2% shall continue to be available to banks for the first year on the restructured amount. 

In order to discourage distress sale by farmers and to encourage them to store their produce in warehouses against negotiable receipts, the benefit of interest subvention will be available to small and marginal farmers having Kisan Credit Card for a further period of upto six months post harvest on the same rate as available to crop loan.

Kisan Credit Card (KCC)

1) The Government has extended the facility of Kisan Credit Card (KCC) to the farmers practicing animal husbandry and fisheries related activities.  

2) All processing fee, inspection, ledger folio charges and all other services charges have been waived off for fresh renewal of KCC. 

3) Collateral fee loan limit for short term agri-credit has been raised from Rs.1.00 lakh to Rs.1.60 lakh. KCC will be issued within 14 days from the receipt of completed application.

National Agricultural Markets (e-NAM)

a) Motto : One Nation - One Market

b) Launched on: 1st July, 2015 

c) This scheme provides an online portal to the farmers for electronic trading and provides a transparent market enabling price discovery and competition.

d) The main objective of this scheme is to give farmers access to prices of different Mandis and facility to sell their products in a transparent manner to those who offer the best price. 

e) One important component of this scheme is that the farmer gets the value of his yield according to the quality as the quality is checked before the electronic bidding. 

f) e-NAM is an important milestone in promoting digital India and digitisation programs of the government. 

Agricultural Produce Market Committee (APMC) Act 

a)  Inaugurated on April 2017. 

b) APMC Act 2017 provides the facility of creating private market yards and farmer-consumer markets. 

Agriculture is the state subject, so if the states actively enforce the act, it will be easier for the farmers to have a liberal market available as this act is based on the model of "ease of doing business" to encourage direct marketing. 



Model APLMC Act, 2017 [Agriculture Produce and Livestock Marketing (Promotion and Facilitation) Act, 2017]

a) It seeks to end monopoly of traditional APMC mandis and allow private players and others to set up wholesale markets. 

b) It provides wider options for farmers to sell produce and get better prices. 
At present, farmers can sell their produce at regulated APMC (Agriculture Produce Marketing Committee) mandis only and they are subjected to different kinds of fees. 

c) This is a model law. Since agriculture is a state subject, only states can implement laws related to the farm sector. 

States are free to adopt in totality or partially depending on their needs. If adopted by states, it will liberalize agri-market. The purpose is to create a single agri-market where with single licence one can trade agri-produce as well as livestock 


d) The government's aim is to set up a wholesale market at every 80 km. 

e) The new law will end the monopoly of APMC and allow more players to set up markets and create competition so that farmers can discover prices and sell their produce accordingly. 

Even an individual keen to buy bulk agri-produce for a big event like marriage can take licence and buy the produce but not more than three times in six months 

f)  APMC will be one of the markets. It will have no regulatory powers. The law promotes multiple market channels like private market yards, direct marketing and even godowns and silos can be notified as markets 

g) The law seeks to set a separate authority to regulate all agri-markets including APMC and provide trading licences

h) It caps market fee (including developmental and other charges) :

- at not more than 1 per cent for fruit and vegetables, and 

- 2 per cent for foodgrain. 

It caps commission agents' fee at :

- not more than 2 per cent for non-perishables and 

- 4 per cent for perishables

Other steps taken by government:

• Inter-linking of rivers

• Providing quality seeds, optimum use of fertilizers, supply of electricity to agriculture sector and use of high yielding varieties are important.  

Major sources of growth operating in agricultural sector:

The major sources of growth operating in agricultural sector:

a) Improvement in productivity of crop
b) Resource use efficiency or saving in cost of production
c) Increase in crop intensity
d) Diversification towards high value crops
e) Increase in production of livestock [Refer article: National Livestock Mission (NLM)]
f) Improved price realization by farmers

Suggested Readings:

References:

• PIB