An Evaluation of Doubling Farmers’ Income

Recently, Prime Minister Narendra Modi expressed his desire to double farmers’ incomes in the year when India celebrates 75 years of independence and enters Amrit Kaal. Now that we’ve arrived in Amrit Kaal, it’s time to revisit that dream and see if it’s been realised, and if not, how it can be improved. It was a noble dream because we could not sustain high GDP growth unless farmer incomes increased.

What exactly is the Doubling Farmers Income Scheme?

  • The government of India set a target of doubling farmers’ income by 2022-23 in February 2016.
  • To promote farmer welfare, alleviate agrarian distress, and achieve income equality between farmers and those working in non-agricultural professions.
  • Doubling farmers’ income can have a direct positive impact on agriculture’s future.

A Noble Vision: Doubling Farmers’ Income

  • Farm Machinery Improvements and Advanced Technologies: If a farmer’s income is doubled, he or she will have access to better farm machinery and advanced technologies, resulting in increased productivity, better seed quality, and improved farming techniques.
  • Increased Agricultural Productivity: Doubling farmers’ income means increasing agricultural productivity, which is critical to meeting the country’s growing food demand.
  • Improved Crop Quality: Increasing farmer income will not only increase agricultural production but will also improve crop quality, which is critical for ensuring food security and meeting export quality standards.
  • Growth of the Indian Economy: Doubling farmers’ income will help the Indian economy grow by increasing rural demand for goods and services, creating jobs, and boosting overall economic growth.
  • Reduced Farmer Suicides: One of the leading causes of farmer suicides in India is financial stress. Farmers’ income will be doubled, providing them with financial security, which will reduce farmer suicides and improve their overall well-being.

Government initiatives in this area

  • Fertilizer subsidy: The budget for fertiliser subsidies has surpassed Rs 2 lakh crore. Even when global urea prices surpassed $1,000/metric tonne, the Indian urea price remained stable at around $70/tonne. This is possibly the world’s lowest price.
  • PM-Kisan: For the fiscal year 2023-24, the government has allocated Rs 60,000 crore to its flagship PM Kisan Samman Nidhi Yojana. Anna Garib Kalyan Yojana: Furthermore, through the PM, many small and marginal farmers receive a free ration of at least 5 kg/person/month. Yojana Garib Kalyan Anna.
  • Subsidies and crop insurance: There are also crop insurance, credit, and irrigation subsidies (drip). States also lavishly distribute power subsidies, particularly for irrigation. Many states even subsidise farm machinery for customs hiring centres.

Evaluation: The effect of all of these policies on farmer income and the environment

  • Farmers’ Income Impacted by Input Subsidies and Output Trade Policies: While input subsidies help farmers earn more money by lowering the cost of inputs like seeds, fertiliser, and irrigation. Government output trade and marketing policies, such as the ban on wheat exports or the 20% export tax on rice, can reduce farmers’ incomes.The current policy approach is pro-consumer rather than pro-farmer, which is a fundamental flaw in our policy framework.
  • Subsidized Inputs and Uncontrolled Procurement Policies Cause Severe Environmental Damage: Excessive subsidisation of inputs such as fertilisers and power, combined with uncontrolled procurement of paddy and wheat in certain states, is causing severe environmental damage. These policies are increasingly in need of rationalisation.

Way forward

  • To understand where farmers stand, it is critical to assess the net impact of input subsidies and output trade policies on their income.
  • Realign support policies with an eye towards environmental outcomes.
  • Millets, pulses, oilseeds, and much of horticulture may be eligible for carbon credits to encourage their cultivation. They use less fertiliser and water. Subsidies and crop support must be crop-neutral.
  • Adopting pro-farmer policies that promote their interests, support income growth, and boost overall economic growth is critical.
  • Agriculture today requires technological, product, institutional, and policy innovations to support more diverse, high-value agriculture that is also environmentally friendly.

@the end

When it comes to doubling farmers’ income, we must recognise that it will take time. It is possible to achieve this by increasing productivity through better seeds and irrigation. It must be combined with unrestricted access to markets for their produce. Diversifying to high-value crops, as well as installing solar panels on farmers’ fields as a third crop, will be required. We can only double farmers’ incomes with such a concerted and sustained effort.

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