The most important characteristic of Indian agriculture is small and highly fragmented land holding owned by small and marginal farmers. Therefore, any policy measure aimed at resolving demand or supply side issues in farming should keep constraints faced by India’s small and marginal farmers in focus. The Interim Budget has proposed befitting strategies for making farming remunerative for farmers, particularly who own 2 hectares or less land, which comprises approximately 80% of the farming community. An attempt has been made to achieve the goal in the short term. However, in long run sustainable solutions are also required that can bring game changing impact at ground level. Furthermore, preparedness at state level for successful implementation of announced reforms will result in real gain for farmers.
By announcing direct income support of Rs 6000 per annum to 12 crore farmers, under Pradhan Mantri Kisan Samman Nidhi, government is taking a major step to provide immediate relief and address financial crisis led by a sharp fall in crop prices. The crop neutral scheme certainly has potential, will lead to less market distortions and can help small farmers sustain themselves in short term. However, implementation at state level in wake of differential progress of digitisation of land records will be a challenge.
A genuine attempt is also required to link farmers directly to markets by eliminating intermediaries, promoting scientific storage to avoid distress sale and improving decision making capability of small and marginal farmers. Government should parallely invest in deploying technology that could strengthen agri statistics and capture information on sowing, crop condition, market prices, stockholding. This can help policy makers prioritize decisions based on supply- demand matrix and secondly help farmers coordinate production planning according to the market need. A special fund should be created to develop a nation-wide reliable Agriculture statistics.
Agriculture is a labour intensive activity. Labor cost accounts for more than 40% of the variable cost of production in most of the cases. In such scenario, farm mechanization is an indispensable constituent not only for raising farm income by saving input cost but also to improve application efficiency of water & other inputs in agriculture. Nation wide promotion of custom hiring model for farm machinery will go a long way in helping large communities of small and marginal farmers who are still not in a position to take full benefit of farm mechanization because of adverse economies of scale.
The other area of concern for the nation is availability of water for agricultural usages. The available water will become gradually more difficult as water tables decline. Despite the fact that investment on irrigation by Government has increased, albeit India’s spending on food and fertilizer subsidy weighs more. Micro irrigation coverage as share of total irrigated land still remains below 10% nationwide. This adds to the plight of Indian agriculture, which has largest footprint in global ranking in terms of blue water consumption. In a country where agriculture accounts for more than eighty percent of water withdrawals, increase in outlay for optimum use of water and Incentivising conservation, recharge/efficient use of water is necessary.
A big challenge faced by small farmers is lack of marketable surplus. Possibility of expansion of net sown area is minimal, nor can they expect immediate rise in productivity due to lack of access to technology. For technology led growth, focus on agri extension is equally imperative. Effective implementation of public agriculture extension system and extension services designed especially for small holders requires a centre stage. The announcement of National centre of Artificial intelligence is a very welcome move. Dovetailing Agriculture extension as one of the mandates of this centre can certainly make our farms become smarter and more connected.
To augment income of small and marginal farmers a continuous long-term focus to develop allied sectors in agriculture is important. Livestock contributes 16 per cent to the income of small farm households. Announcement of interest subvention for farmers pursuing animal husbandry, setting of Rashtriya Kamdhenu Ayog and allocation under Rashtriya Gokul Mission signifies that development of livestock sector is a major part of Government’s vision of doubling farmers’ income, which is highly appreciable.
The risks small and marginal farmers are facing have been increasing for years. Though such risks are inherent in agriculture since the production process usually takes place under open sky, but ways have to be found to help farmers tide over them.
Inclusion of Animal Husbandry and Fisheries sector under the Interest Subvention scheme will bring the farmers at par with the other crop farmers. In the era of write off of loans, this will create a positive outlook for on time loan repayment. Such positive steps will also provide an additional source of income to rural livelihoods and safety nets against the risk of crop failures due to natural calamities.
In nutshell, agriculture needs to become a more remunerative activity which will require a right blend of short and long term interventions in wide range of priority areas.
T R Kesavan is Chairman, FICCI National Agriculture Committee