Climate change may lower farm incomes by up to 25%
NEWDELHI: Farm incomes in India may fall by up to 25% in unirrigated areas in the medium term as a result of climate change, the Economic Survey warned, while pointing out that agriculture GDP growth and farm revenues have stagnated in the past four years due to monsoon failures.
The Economic Survey praised the government’s goal of doubling farm incomes by 2022 and suggested radical follow-up action, including “efforts to bring science and technology to farmers, replacing untargeted subsidies (power and fertilizer) by direct income support, and dramatically extending irrigation but via efficient drip and sprinkler technologies”.
An analysis in the Economic Survey found that during the years when rainfall levels drop 100 mm below average, farmer incomes would fall by 15% during kharif (summer) and 7% during the rabi (winter) crop seasons.
“Climate change could reduce annual agricultural incomes in the range of 15% to 18% on average, and up to 20% to 25% for unirrigated areas,” the Survey said, adding, “at current levels of farm income, that translates into more than ₹3,600 per year for the median farm household.”
However, the Survey also said that fully irrigating Indian agriculture—currently more than half of India’s crop area is rainfed—will be a “defining challenge for the future”.
“Against the backdrop of water scarcity and limited efficiency in irrigation schemes... technologies of drip irrigation, sprinklers and water management—captured in the ‘more crop for every drop’ campaign— may well hold the key to the future of agriculture,” it said.
On recent trends in the agriculture sector, the Economic Survey flagged the deceleration in rural wages beginning just ahead of the kharif crop season last year, lower planting of crops during 2017-18 which reduced demand for labour, and unusually low prices for farmers growing pulses and oilseeds.
Significant price fluctuation in perishables such as onions, potatoes and tomatoes have also contributed to income uncertainty for farmers, the Survey said.
“The past few seasons have witnessed a problem of plenty: farm revenues declining for a number of crops despite increasing production and market prices falling below the minimum support price (MSP),” the Economic Survey said.
On future reforms in the agriculture sector, the Economic Survey said they need to be tailored by making a distinction between “two agricultures” in India.
In the input-intensive and irrigated cereal-growing areas in northern India, price support and input subsidies have to make way for “less damaging” direct benefit or cash transfers, while in the rain-dependent and low public procurement states in central, western and southern India, the focus needs to be on investing in research and technology for noncereal crops, removing market barriers, improving post-harvest facilities, and developing a better livestock policy.
“The Economic Survey only analyses the climate risks faced by the farmers without spelling out in detail how this needs to be addressed,” said Kiran Vissa, a farm activist and national working group member of the All India Kisan Sangharsh Coordination Committee, a coalition of farmer organisations in India.