Jumla in the making: Double Farmers’ Income

Jumla in the making: Double Farmers’ Income Thu, 23 Aug 2018

Jumla in the making: Double Farmers’ Income

Recent government reports published by NITI Aayog on a survey by NABARD has shattered the hollow claims of PM Modi who has been reiterating his resolve to double farmers’ incomes by 2022. Data from the report not only makes this claim sound implausible, it also dents the PM’s statements that farmers' living conditions and debt have improved substantially since the NDA government came to power. The government has claimed it has doubled the budget for agriculture this year but the truth remains that multiple committees, working groups and action plans later, the government has no achievement to show for in the field of agriculture.

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According to the Dalwai Committee set up in 2015-16, the average Indian farmer household income was pegged at Rs 96,703 per annum. For this income to be doubled to Rs 1,93,406 in 2022-23, the real incomes  need to grow at CAGR of 10.4% at an all India-level. However, as the NABARD All India Rural Financial Inclusion Survey (NAFIS) reveals, the average agriculture household income in the past four years has only increased by a mere Rs 2,505/month to Rs 8,931/month in 2016-17. The effects of this low rise in income manifests in several other aspects like rising indebtedness, lesser financial inclusion, and failure of insurance facility, according to the report. The survey shows that 41% of rural households are indebted, of which 43% are agriculture households. Less than half the rural population have savings in financial institutions and only about one-fourth can operate mobile banking which highlights the increasing marginalisation of these poor farmers.

Two years since the PM announced his goal to double farmers’ income, the growth in agriculture remains dismal. Given the performance of agriculture in 2016-17 and 2017-18, the required CAGR in the remaining five years will be much higher than the original calculated rate of 10.4%. As per news paper reports, national average incomes of farmers in several states like Bihar and West Bengal should grow at 13% if the goal of doubling farmers’ income is to be achieved, which appears to be highly unlikely in the present circumstances. Moreover, like almost all their other schemes, this scheme too lacks the necessary foresight, for example- how does the government plan to absorb the production boom that will result from the implementation of doubling farmers’ income? Will the consumption keep pace with the production? These are few crucial questions that have been raised but the government remains reluctant to answer or is ignorant of.

The BJP government has completely abandoned the farmers. After failing to deliver on crop insurance and MSP, this report deals another blow to hopeful farmers who believed that their situation will be ameliorated in the next few years. The message of the government to the farmers is that of clear apathy and it has displayed that no amount of farmer protest and agitation can make PM Modi take any effective action. 

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