Double dreams
For that, farmers will have to make an investment of `463 billion in the next five years
Can Indian farmers' income be doubled by 2022?
ANEW INDIA” is the latest national agenda. Prime Minister Narendra Modi in his fourth Independence Day speech made an appeal with his trademark gesture of both hands pointing towards the gathering: “A new India that would fulfil the dreams of the young and women, and see the income of farmers double.” Modi first promised doubling farmers’ income by 2022 two years ago. This is the first time he has added it to his “New India” agenda. At a time when farmers are found more on the streets than in farms protesting for better pricing and relief from the agrarian crisis, it is a promise everybody would desperately pitch for.
Though many have doubted that this promise would be fulfilled, an official committee to lay the roadmap—Committee on Doubling Farmers’ Income led by Ashok Dalwai—has recently submitted its report. It reveals the challenges of fulfilling the promise. Starting from a historical background of progress in agriculture to what needs to be done, the report is very expansive as well as specific in suggestions. Going by the committee’s general observation, the target is achievable, which this magazine also recently estimated.
First, the report says that during 2004-2014, agriculture reported a historic growth rate. The agricultural growth was an impressive 4 per cent during this period as compared to 2.6 per cent during 1995-2004. Four per cent growth is considered as the gold standard as far as agriculture is concerned. But in recent years, the sector seems to be slowing down which is widely known. Second, the report says that this growth rate was possible due to better minimum support price, increased public investment and also better market price. Third, it says that the real income from farming has to be doubled which is around 60 per cent of a farmer’s total income. This means only this source of the total income would be doubled as per the target fixed for 2022. Interestingly, the report says that this involves a change in the ratio of a farmer’s income from farm and non-farm sources: from the present 60:40 to 70:30 in 2022. This means that India has finally accepted the dominance of farm income in farmers’ overall wellbeing. The other way to look at this is to accept that the dream of adopting non-farm income as an alternative to dwindling agriculture is now junked.
But let’s look at the cost of achieving this target. This is important because agriculture is a private venture supported by official policies and programmes. It means both private and public investments are needed to double farmers’ income. While estimating the private and public investment required, the committee has assumed that the sector would grow at the same rate as of 2015-2016 till 2022 with the same efficiency. Practically, this means an annual growth of 9.23 per cent of a farmer’s income. For this to happen, farmers need to invest `46,299 crore (at 2004-05 prices) in the next five years. Farmers invested `29,559 crore in 2015-16. For governments, the investment has to be `102,269 crore; up from `64,022 crore in 2015-16.
This raises a few questions: do farmers have the capacity to invest such a huge amount of money on agriculture without any profits? A large chunk of public investment is for spending on irrigation projects which, as is widely known, are not taking off. Farmers already have a huge debt. This strategy will just add on to their debt. In an ideal situation, the agenda of doubling farmers’ income should have started from cleaning up farmers’ debt. But the Union government wants the states to take care of that. Another round of Tu tu main main?