Business Standard

Govt tar­gets to raise av­er­age farm house­hold in­come by FY23 CHEW ON THIS


The av­er­age in­come of a farmer house­hold es­ti­mated at ~96,703 in 2015-16 (at cur­rent prices) is tar­geted to rise, by gov­ern­ment ef­fort, to ~2,19,724 (at cur­rent prices) by 2022-23.

The fig­ure has been es­ti­mated in an ini­tial re­port of the of­fi­cial com­mit­tee on dou­bling farm­ers’ in­come.

The bench­mark in­come for the year 2015–16 at cur­rent prices has been ar­rived by ap­ply­ing the year-on-year state level net state do­mes­tic prod­uct growth rates at cur­rent prices on the de­rived in­come of agri­cul­tural house­holds, us­ing the NSSO 70th round data­base as the source. The all-In­dia in­come for agri­cul­ture house­holds us­ing this method, the re­port said, comes to ~96,703.

The de­clared aim of dou­bling farmer house­hold in­come by 2022-23 would need ad­di­tional pub­lic and pri­vate in­vest­ment of ~6.4 lakh crore, at cur­rent prices. The ini­tial re­port de­tails seven main fac­tors in this re­gard. Bet­ter crop and live­stock pro­duc­tiv­ity are among these, as are bet­ter prices in real terms re­ceived by farm­ers. The first four vol­umes of the 14-part re­port were made pub­lic on Mon­day.

The tar­geted 127 per cent in­crease in in­come will lead to the share of farm in­come in to­tal farmer house­hold in­come ris­ing from 60.2 per cent in 201516 to 69.2 per cent in 2022-23. At con­stant prices, the av­er­age in­come of a farmer house­hold is tar­geted to be in­creased to ~1,56,154, from ~96,703. In­come Tar­geted farm­ers’ in­come in base and ter­mi­nal year 2015-16 (Base year) 2022-23 (Ter­mi­nal year)* 2022-23 (Ter­mi­nal year)** 1,52,031 at cur­rent prices is cal­cu­lated by as­sum­ing an av­er­age yearly in­fla­tion rate of five per cent.

The com­mit­tee on dou­bling farm­ers’ in­come is headed by Ashok Dal­wai, chief ex­ec­u­tive of the Na­tional Rain­fed Area Au­thor­ity. The in­come es­ti­mates are of the panel.

In to­tal in­come, 69 per cent would come from core farm ac­tiv­i­ties. For the tar­geted 10.4 per cent an­nual in­crease in farm­ers’ in­come from 2015-16 to (~) 2022-23, the draft re­port said an ad­di­tional pri­vate in­vest­ment of ~1,31,840 crore is re­quired at 2011-12 prices, be­sides pub­lic in­vest­ment of ~5,08,080 crore.

This re­quire­ment for pri­vate in­vest­ment varies across states, from ~126 crore to ~14,665 crore. That of pub­lic in­vest­ment varies from ~400 crore to ~94,600 crore. The re­port says pub­lic in­vest­ment is below the na­tional av­er­age in As­sam, Ker­ala, Ut­tar Pradesh, Mad­hya Pradesh, Bi­har, West Ben­gal, Tamil Nadu, Ra­jasthan, Pun­jab and Odisha.

The es­ti­mated needed in­crease in weighted pub­lic in­vest­ment — to­gether in agri­cul­ture, ir­ri­ga­tion, ru­ral roads and trans­port, and ru­ral en­ergy — is pegged at 14.17 per cent an­nu­ally. The com­mit­tee strongly rec­om­mends step­ping up of in­sti­tu­tional credit on a large scale. Only 50-60 per cent of the in­vest­ment re­quire­ments of farm­ers are be­ing met through in­sti­tu­tional loans.

It cau­tions that an in­come sup­port sys­tem isn’t a long-term so­lu­tion for tack­ling farmer dis­tress, par­tic­u­larly in the back­drop of de­plet­ing nat­u­ral re­sources and un­cer­tainty caused by cli­mate change, as also the de­pen­dence of a huge labour force on the farm econ­omy. On de­vel­op­ing of mar­ket­ing in­fra­struc­ture, it says all states must adopt the model Agri­cul­tural Pro­duce Mar­ket­ing Com­mit­tee Act drafted by the Cen­tre. The agri­cul­ture min­istry must dis­cuss this with states to make it op­er­a­tional. Also, that about 10,000 whole­sale and 20,000 ru­ral re­tail mar­kets are needed to achieve the de­sired mar­ket den­sity and net­work these into a pan-In­dia sys­tem.

It also said a key as­pect of dou­bling farm­ers’ in­come is to fo­cus on ex­port. The aim should be to raise agri­cul­tural ex­port by a min­i­mum of three times by 2022-23, to reach $100 bil­lion (~6.4 lakh crore). And, go beyond ce­re­als and meat, at present the bulk of our ex­port. All of which re­quire a sta­ble duty struc­ture, for im­port, too.

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