What is the issue?
- The government has released a seven-point plan to double farmer income by 2022.
- The package has some glaring deficiencies.
What are the flaws?
- No New Ideas - The plan is little more than a mere repackaging of the ongoing agricultural development schemes.
- Productivity - It is focused more on raising farm productivity than on improving the profitability of farming.
- This disregards the fact that higher farm output does not necessarily lead to higher income.
- Bumper harvests have in fact often caused a slide in prices.
- Marginal Farming - Income from increasing output can at best be only marginal because land holdings of most farmers are too small.
- Thereby, they can’t produce sizeable marketable surpluses.
- Growth Rate - Doubling of income by 2022, from current levels would require an estimated income growth of over 10% annually.
- Such acceleration is hard to come by through the productivity route alone.
What are priority areas?
- More emphasis on various lucrative farm and not-farm economic activities that find a passing mention in the plan is needed.
- These can include, among others, high-value farming involving horticulture, floriculture, herbal farming and farm forestry.
- Allied activities, including novel ventures such as rabbit and quail rearing can also be promoted.
- Waste reduction and value-addition of farm produce with effective market support could help enhance incomes.
- Also, the creation of off-farm employment in rural sectors needs to be established.
What are the policy changes required?
- A stable policy regime governing agricultural pricing and trade needs to be established.
- Trading - The current pricing policies seem to have a pro-consumer bias, dictated chiefly by the need to keep inflation down.
- This spurs uncalled for interventions such as frequent opening and shutting of imports and exports of farm goods and imposition of stockholding and other curbs on trade.
- This needs to change to ensure a balance of produce and consumer interests.
- Prices - As minimum support price (MSP) mechanism has failed to show results, it needs to be supplemented with other measures.
- One such is the price deficit reimbursement scheme of Madhya Pradesh that seeks to compensate farmers for any shortfall in realising the MSP.
Source: Business Standard
