Doubling farmers' income

Agri policies should expedite shift from output to income

When the government announced the target of doubling the farmers’ income by 2022, it looked a tall order. But going by the latest evidence, based on systematic studies, it seems that the goal might not be completely missed. In fact, the net inflation-adjusted income of farmers has surged two-fold, or close to that in many states, especially in the case of those who are growing commercial crops, such as sugarcane, cashew, tea, coffee, or rubber. The lag in many other cases is also not too large. The reports brought out by the Economic Research Department of the State Bank of India (SBI) and the Indian Council of Agricultural Research (ICAR) are cases in point.

The SBI report reckons that the farmers’ average earnings have gone up by 1.3 to 1.7 times between 2017-18 and 2021-22 across the country. For some crops, such as soybean in Maharashtra and cotton in Karnataka, the returns have doubled during this period. The study, which claims to have used a well-represented sample of large, small, and marginal farmers, has concluded that agriculture’s allied and non-farm activities have also contributed to boosting their revenues. The returns from these sources have, in fact, clocked marginally higher growth of 1.4 to 1.8 times. This is in line with the findings of the 77th round of the National Sample Survey, which had indicated that the sources of farm income have become highly diversified and are no longer confined only to crop farming and animal husbandry.
 

The ICAR report, based on the case studies of 75,000 farm households in all states and Union Territories, presents an even more reassuring picture. According to this, net growth in farm incomes varies from 125 per cent in Ladakh to over 270 per cent in the Andaman and Nicobar Islands. States and Union Territories like Uttarakhand, West Bengal, Chhattisgarh, and Puducherry have witnessed more than a 200 per cent rise in farmers’ earnings. The increase in most other states ranged from 150 to 200 per cent. Both these reports, however, display their expected biases in picking the factors contributing to income growth. While the SBI report underscores regular hikes in minimum support prices, which normally acted as the benchmark for market prices, as one of the key growth drivers, the ICAR report holds technological interventions responsible for it. The fact, however, is that both these factors have played their respective roles and have complemented and supplemented each other. But one aspect that is starkly clear is that the farmers still rely greatly on credit for investing in yield-boosting inputs and this is not easily accessible despite the introduction of Kisan Credit Cards. The SBI report’s suggestion to convert these cards into “livelihood credit cards” merits consideration because it could wean farmers away from usurious moneylenders who take away a sizable part of their income.

It is also a fact that the government’s agricultural pricing policies still remain a key determinant of farm incomes. The focus of these policies needs to shift from increasing production to boosting income, as emphasised by the M S Swaminathan-headed National Commission on Farmers. The economic interests of the farmers cannot be disregarded while strategising on containing food inflation. Otherwise, the goal of doubling their income would remain elusive.