Doubling Farmers Income: An agenda on paper

• On February 28, 2016, Prime Minister pledged to double farmers’ income by 2022-23—his gift to the country in its 75th year of independence.
• In the six years since then, the Union government has not given the most basic figures on how much farmers earned in 2016 and how much they earn now, making it impossible to know whether the farmers’ incomes have doubled.
• In three of the past five years, the Union agriculture ministry has spent less than what it had budgeted for centrally sponsored agriculture schemes. In 2019-20, the actual expenditure on such schemes was 29% lower than the allocated amount.
• In 2020-21, the deficit was 18%. The actual expenditure for 2017-18 was also 4% lower

than the budget.

• This year (2022-23), the allocated budget for centrally sponsored schemes is Rs.105,710 crore, which is among the lowest since 2019-20, when the Centre rolled out the PM-Kisan Yojana

What is the PM-Kisan Yojana?

• PM Kisan aims to provide assured income of Rs. 6000 per annum to the landholding farmers at household level (not to each farming individual).
• The income will be transferred directly into the bank accounts of beneficiary farmers, in three equal installments of Rs. 2,000 each.

Eligibility : 

• All landholder farmer’s families in the country are eligible for the PM-Kisan Scheme subject to the prevalent exclusion criteria. 
• Farmers who do not own any land are not eligible for this scheme.
• Excluded from the scheme
  • Institutional land holders,
  • Farmer families holding constitutional posts,
  • Serving or retired officers and employees of state/central government as well as PSUs and government autonomous bodies.
  • Professionals like doctors, engineers and lawyers as well as retired pensioners with a monthly pension of over Rs 10,000 and those who paid income tax in the last assessment year.

Identification of beneficiaries : The responsibility of identifying the eligible beneficiary farmers and uploading their data on the PM-KISAN portal lies entirely with the state governments.

• As per the latest Situation Assessment Survey released by the National Statistical Office (NSO), as many as 31.6 million households received the installment in December-March

2018-19, which is only 33% of the 93.09 agricultural households in the country in 2018-19.

• The scheme’s coverage has since increased substantially and almost 107.6 million land-holding farmers received the April-July 2022-23 installment.
• The annual income of an average agricultural household in India is almost Rs. 1,20,000. A Rs. 6,000 increase can only make a marginal difference since it does not even cover inflation.
• The Pradhan Mantri Fasal Bima Yojana, the Centre’s flagship crop insurance scheme launched in 2016, covered only 46% of the agricultural households (43 million) during the 2019 kharif season. By kharif 2021, the scheme had enrolled 49.2 million farmers. The

scheme faces multiple implementation challenges.

• While the schemes can serve as a measure of development and of relief provided to the farmers who choose to enroll, assuming blanket participation by all farmers can be misleading.

Farming does not Pay

• As per NSO, in 2018-19, some 54% of rural households were engaged in farming down from 57.8% in 2012-13.
• While the monthly income of an agricultural household has increased from Rs. 6,426 in 2012-13 to Rs. 10,218 in 2018-19, the share of income from cultivation has reduced.
• In 2012-13, households earned 48% of their income from crop production. The share dropped to 37%  in 2018-19.
• Wages (39.8%) have now replaced agriculture as the primary source of income for agricultural households.
• The share of agricultural households under debt has reduced marginally between the two years, but more than half of the households have loans. The average amount of the debt has also increased from Rs. 47,000 in 2012-13 to Rs. 74,131 in 2018-19.
• Land fragmentation is the other challenge. The share of marginal agricultural households, possessing less than 1 ha, has increased from 69.44% to 70.44% between 2012-13 and 2018-19.  But the share of small and medium farmers (owning 1.01 ha to 10 ha) has dropped from 30.52% to 29.2% during the period. The share of rich farmers has remained constant at 0.4%.

Designed to Fail

• Since the last 5 years, there has been a rise in the number and intensity of farmer protests. According to an analysis by State of India’s Environment (SOE), the country reported 35 major protests in 2017 but since 2020, the number of major farm protests has skyrocketed to 165. Some 22 states/Union Territories have witnessed protests since 2020, up from 15 states in 2017.
• Deaths by suicide among farmers, which is already at an uncomfortably high number, refuses to ebb. According to the Accidental Deaths & Suicides in India, released by the National Crime Records Bureau, in 2020, as many as 5,579 farmers or cultivators died by suicide, which is an average of over 15 farmer deaths a day. In 2019, the number stood at 5,957.
• Demonetisation and GST (goods and services tax), too, harmed the prospect of raising farm incomes.
• The experts suggest that the solution lies beyond the farm sector, in the macroeconomy.

Way Forward

1. Bringing in legislation that makes a “living wage” mandatory for workers and fixes minimum support price (msp) for all crops after factoring in the full production cost (including components like cost of in-house labor and equipment).
2. There is a need for a significant increase in public investment and credit  supply to support the farmers.