Will India be able to double its farmers’ income in next 5 years?

The agriculture based Indian Economy needs high agriculture income for the farmers who feed the 1.25 billion Indian population. Not only this like developed countries who despite having much lesser area under cultivation, export number of farm products, India also needs to be a prominent exporter of agriculture produce. This will attract more and more people towards agriculture, the backbone of the country.

But how to achieve the dream of substantially increasing the farm income is a big question. The Prime Minister of India, Shri Narendra Modi in his independence day speech on August 15, 2017  laid out the route map to double the agriculture income in next 5 years.

Key points: How to double the farmers’ income- the road map

  • The Prime Minister Narendra Modi said that his government has decided to double the farmers’ income by 2022 when India would celebrate 75 years of Independence
  • The goal is achievable if the farmers adopt and use modern technology in cultivation like drip irrigation as it will direct the maximum utilization of water with minimum quantity. The Prime Minister said “Water is like God, we have no right to waste it.”
  • The focus will then be on “More crop per drop”, “Hark khet ko pani” (water for every farm), “Doubling farmers’ incomes”.
  • Laying the route map to double the farmers income, the Prime Minister said “Centre has decided to double farmers’ income by 2022 by improving technology, increasing milk production, use of solar light, honey production.  
  • Increase afforestation by planting more trees along the river banks to avoid soil erosion during floods and to keep the rivers flowing eternally without getting them dry as has been done by Government of Madhya Pradesh by organizing the Narmada Yatra. This way Narmada would not go dry even after 100 years.
  • The Niti Aayog has already come out with its ‘Three Year Action Agenda’ – a plan that covers a time period up to the 2019. In its chapter on agriculture titled ‘Agriculture: Doubling Farmer’s Incomes’, the economic think-tank has put forth a  4 point action plan to double the incomes of India’s farmers.
  • The measures proposed are in the right direction if the farmers’ incomes have to be doubled. The 4 point action plan includes the following measures: 1) Remunerative prices for farmers by reforming the existing marketing structure; 2) Raising productivity; 3) Reforming agriculture land policy; and 4) Relief measures.
  • A subsidy would be provided on targeted produce in case the price falls below MSP-linked threshold. One advantage of this, as highlighted by the action plan, is that it would spread price incentives to producers in all the regions and all the crops considered important for providing price support.
  • As per the Agriculture Census 2010-11, 67.10% of India’s total farmers are marginal farmers (below 1 h.a.) followed by small farmers (1-2 h.a.) at 17.91%. Since Indian agriculture is dominated by marginal farmers who have small holdings, raising productivity is likely the single most important factor if incomes of this group are to be doubled. 
  • Niti Aayog has also called for substantive investment in irrigation, seeds & fertilisers and new technology coupled with a shift into high-value commodities such as horticulture, poultry and dairying to double incomes.
  • A major portion of farm subsidies is accounted by India’s fertiliser subsidy which has increased by around five times in the last ten years from Rs 12, 595 crore in 2001-02 to Rs 67, 971 crore in 2012-14 at current prices. In 2015-16, the government budgeted Rs 73,000 crore (about 0.5% of GDP) on fertiliser subsidy. While the Niti Aayog has called for the application of soil cards for customising fertiliser use, the Economic Survey of 2015-16 pitched for reforms to increase domestic availability via less restrictive imports and to provide benefits directly to farmers using ‘JAM’ (Jan Dhan, Aadhaar, mobile).  

Income to increase with Israel model
The Prime Minister Modi’s Israel visit has placed a heavy stress on agricultural cooperation. The government’s stated aim is to double farmers’ incomes by utilizing the Israel model. It is felt that Israeli agriculture and irrigation technologies can help deliver this goal. Israeli technology is vital for this aim and thus encapsulates the government’s thinking on how to raise agricultural productivity and thereby increasing the farmers’ income.

What is Israel model?
Israel’s water management system is second to none. When the nation was founded in 1948 it realized that it was severely water stressed. 60% of the land in Israel was desert and the annual rainfall was 50 cm. There are no such rivers like Ganga, Yamuna, Kaveri, Brahmaputra, Godavari, Narmada, Betwa in Israel nor there is any chance of water sharing in neighborhood. Rainfall has fallen to half the level of 70 years ago while the population has grown 10 fold according to Israeli newspaper Haaretz. Israel thus had to come up with innovative water solutions to increase its agriculture production manifold with the scarce water it has.

Centralized Water Management: Solution found
Israel had to find the solution to the crisis and the result is a centralized water management grid, developed over the decades to make maximum use of water. The major strategy of the solution is drip irrigation. Instead of flooding fields, water is delivered directly to the crop/plants roots in small quantities.

Indian Agriculture far behind with excessive or no water
A quick comparison of Israel model to Indian agriculture will surprise us all. Only a small portion of Indian agriculture is irrigated, mostly through canals. The canal network is most extensive in North India, particularly Punjab, Haryana and Northern Rajasthan, and relies on excessive use of water, leading to water stress and overuse.

The farmers in these regions think that if more water is delivered to their fields, the higher will be the productivity. This attitude is being severely challenged by changing water patterns due to overuse and climate change.

Israel Technology can help here
This is where the government thinks Israeli technology can help by following the strategy of Israel:

  • The Middle Eastern nation recycles 90% of sewage and the recycled water is used for agriculture.
  • Plants have been engineered to grow in arid conditions and sea water is desalinated for human use.
  • Israeli firms have the technological know-how while Indian partners know how to navigate the complex bureaucratic maze here
  • Israel’s government has committed Rs 500 crore which the Indian government may match to adopt Israel model and increase farm income with less expenses and optimum use of water.
  • The Israeli experience with collectivized farming has become a template for a plan that is being pushed by National Bank for Agriculture and Rural Development (NABARD). A Kibbutz is an Israeli collective community based on agriculture while a Moshav is a cooperative agricultural community. Both these are being explored as templates for “farmer-producer” companies by NABARD.

Hurdles

  • One of the main problems of Indian agriculture is the small size of land holdings.
  • Corruption in cooperatives is a well-known problem, particularly in Maharashtra. Besides, the government does not have the money to pump into co-ops.
  • Various experts have cast a pall of gloom over the claim whether it is indeed possible to double incomes by 2022-23. This is primarily because agricultural growth in the post-reform period, barring a few exceptional years, has been stagnant and has historically failed to meet the target set by the government. For example the average annual rate of growth in agriculture and allied sector during the period from (1991-92 to 2013-14) comes at 3.2% – lower than the targeted 4%.
  • Niti Aayog has suggested reforms in two areas: marketing reforms and minimum support price (MSP) reform.  It is important to see how the suggested actions will double the income of the farmers’ and to what extent the government is serious about it.
  • It must be noted here that since agriculture is a state subject, the central government cannot do much in marketing reforms and minimum support price (MSP) reform  apart from facilitating the reform process.
  • On the one side resources like water and land are limited and on the other hand land holding is getting fragmented. The problem is further compounded by rising input costs.

Action taken so far to increase farmers’ income
The government and NABARD are keen to push farmer-producer companies where a large group of farmers pool their land together and work as a collective. They could be registered as a non-profit, company or trust, would produce business plans and access capital from formal banking channels.

Maharashtra has already asked the Israeli Consulate in Mumbai to prepare a plan for establishing a farmer-producer collective in Dehni village in Yavatmal district, which has one of the highest incidences of farmer suicides. 

India has already adopted drip irrigation in some parts of Maharashtra, Gujarat and Haryana. An article in Forbes India in 2010 reported that the Israeli firm Netafim, the world’s largest micro-irrigation company, indigenized its Family Drip System (FPS) for mainstream farming in India. Drip irrigation is now available for farms that are as small as a quarter acre. 

Indian and Israel governments hope to take the partnership forward by providing a government to government framework that would enable corporate partnerships to flourish.

Mammoth task
Doubling agricultural income by 2022 is a mammoth task but is also one that is the need of the hour. With majority of the country’s population dependant on agricultural activities, no true development can be said to be meaningful unless it incorporates the needs of this sector. Increasing farmer suicide rates and increasingly erratic weather patterns further add to the problem. There are intense complexities and therefore, the focus of the government on this sector is much needed. The journey to double the farmers’ income is a long and very tedious but the journey has begun. The need is to ensure that the implementation in right direction by all stakeholders is uniform, effective and done whole heartedly.