Doubling farmers’ incomes: a long journey

Legislative processes to repeal the 2020 agricultural laws were completed with the President’s assent on November 30. The agricultural laws were envisioned to increase the net income of the farmers by providing extensive market facilities in addition to the traditional APMCs with an idea of ​​”higher real remuneration income on the products of the farmers”. Farmers continue to protest, demanding a legal minimum support price (MSP) guarantee and providing jobs for family members of those who lost their lives during the protest. On the other hand, the government said there was no data on the number of farmers who died during the protests. According to informal estimates, more than 700 farmers have died during the protests. The government should engage in dialogue with farmers’ associations / unions to identify the dead.

The three agricultural laws that were enacted in 2020 and subsequently suspended by the Supreme Court in January, must be viewed from the perspective of agricultural marketing reforms and the government’s goal of doubling farmers’ incomes (ci -after DFI) by 2022-2023. The repeal of agricultural laws has implications for the purpose of the DFI. In this context, it is essential to explore and analyze the nuances of DFI and a way forward to achieve the intended goals.

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The results of the latest national sample survey on “Assessment of the situation of agricultural households and household land and animal holdings in rural India, 2019 (SAS, 2019)” are important for the reasons (i) of the protests in farmers’ price (ii) of the DFI target. The results of the survey are useful for a comparative picture of the agrarian variables with that of the situation in 2013 (SAS, 2013). The comparison is essential to assess the functioning of agricultural policies with the government’s objective of DFI by 2022-2023. Some of the main findings are worth considering in the context of the DFI.

In 2012-13, the average monthly income of a farming household was Rs 6,426. Of this total, only 59.82% of income comes from cultivation and animal husbandry. To be precise, Rs 3,081 (47.95%) is the net income from cultivation. From here it is clear that farm income is lower than non-farm income including wages / salaries and business. The average monthly consumption expenditure in 2012-13 was Rs 6,223. In this context, Prime Minister Narendra Modi set the DFI target for 2022-23 in 2016. The DFI committee calculated the average annual income for the year 2015-16 at Rs 96,703 using the extrapolation method. The committee said that to achieve the target, farmers’ income would have to grow by 10.4% at constant basic prices.

In this context, SAS 2019 reveals some critical information on the evolution of farmers’ incomes during the period 2018-19. In SAS 2019, farmers’ income was calculated using two approaches, namely (i) expenses paid (ii) expenses paid + expenses charged. Total income using the paid expense approach is Rs 10,218 compared to Rs 8,337 in the latter approach. Taking the expense-paid approach, farmers’ income was Rs 10,218 in 2018-19 compared to Rs 6,426 in 2012-13. Does this mean that farmers’ income has increased by 3,792 rupees in the space of six years? To answer this question, we need to break the data down into separate headings, as was done in SAS 2013 and 2019.

Out of 10,218 rupees, the net income from agricultural production is 3,798 rupees, or only 37.2%. The main income comes from wages and salaries with Rs 4,063 (40.8%). Overall, farm income decreased from 47.95% to 37.2% and non-farm income increased to 62.8% from 59.82%. The net income from farming is Rs 3,071 and Rs 3,798 in 2012-13 and 2018-19 respectively. This would mean that the farmer’s net income increased by Rs 727 in the space of six years with an average of Rs 122 per year.

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The rise in the costs of agriculture and production and the disengagement of the State in the face of structural brakes are one of the main determining factors of the agricultural development of the country. The marginal increase in the farmer’s net income derived exclusively from crop production substantiates this point. SAS, 2019 showed the plight of farmers using variables such as land fragmentation, average monthly net income, land rental, indebtedness, institutional credit, and agricultural sustainability. Among these, with the exception of institutional credit, all other indicators show a discouraging trend from the point of view of agrarian policy.

Neoliberal policies

The agrarian crisis has worsened since the adoption of neoliberal governance policies and the development model. The evolving role of the state in the neoliberal era from regulator to facilitator of governance has widened unequal access to land and ownership of land. Even the modest socialist program of land reform has been left out, perpetuating existing socio-economic inequalities within the farming community, resulting in significant migration from rural areas to neighboring towns and urban areas, especially marginal farmers, small and medium.

The Union and state governments must work together to solve the problems in agriculture that are rooted in policies, institutions, market structures rather than just pursuing the politics of voice banking through schemes. populists. In the context of the political economy of the agrarian crisis and rural distress, it is relevant to ask whether political parties are drawing fair inferences from farmers’ protests to refocus their attention on agriculture. The government’s goal of DFI can only become a reality if it sincerely strives to address some of the aforementioned structural and institutional issues. The vision of the DFI can only be realized by pushing land reforms, instituting credit policies by state governments and modifying the price mechanisms by linking them to the general price index as promised by the BJP in the 1998 electoral manifesto.

(The author is PhD Fellow, Center for Political Institutions, Institute for Social and Economic Change, Bengaluru)


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