According to the Census 2011 figures, nearly 70% of India’s population lives in rural areas. Most of this rural population is engaged in agriculture and allied sectors. Therefore, farmers and people engaging in agriculture and allied activities constitute a major chunk of the population of India.
Unfortunately, for decades, this important sector has suffered from passive policy-making and has been still largely dependent on informal sources of credit. A dedicated effort to help the farmers from the farm to the market and back is essential to bring organization and structure to agriculture. The present government came in and took many big-scale policy decisions to change the functioning of this sector. Let us analyze these schemes and their impact in detail.
Increase in budget for agriculture: Putting money where the mouth is
If we talk about giving emphasis to farmers, one has to put money where their mouth is. The focus given to a particular sector like agriculture can be seen in the budget allocation. There has been an increase of 74.8% in the budget allocation from the UPA era (2009 to 2014) to the present NDA era (2014 to 2019). This has been illustrated in the graph below:
In fact, the budget allocation to agriculture, allied and rural sectors at Rs 1,87,280 crore for 2017-18 was the highest-ever for this sector.
The sector-wise allocation to different facets of an agricultural economy have also seen an increase in budget allocation from 2009-14 to 2014-19. This has been illustrated in the following figure:
Allocation & Expenditure: Two Governments, Two Stories
Under the last administration, the expenditure of the Ministry of Agriculture used to be less than the budgetary allocation.
For instance, during the year 2011-12, the budgetary allocation was Rs 24,526 crore and the amount spent was Rs 23,290 crore. Similarly, in 2012-13, the budgetary allocation was Rs 28,284 crore and the amount spent was Rs 24,630 crore. In 2013-14, the budgetary allocation was Rs 30,224 crore and the amount spent was Rs 25,896 crore.
The spend on agriculture under the previous administration was lesser than allocation. Under the current administration, the Ministry is spending more than the budgetary allocation for farmers’ welfare. For instance, in 2016-17, the budgetary allocation was Rs 45,035 crore. But it was increased to Rs 57,503 crore in the revised budget.
Policies helping farmers during production
The government’s approach to helping farmers should be a comprehensive strategy working right from production on the field to procurement and availability of markets to ensure that the life of a farmer becomes easy and his income is secured.
The following major steps have been taken to ensure that there is a definite structure where farmers get all the help they need during the production process:
- Soil Health Card: Soil Health Cards carry crop-specific recommendations for nutrients and fertilisers to help farmers improve their productivity. In the first cycle (2015-16 to 2016-17), more than 10.66 crore cards were dispatched, while in the second cycle (2017-18 to 2018-19), more than 2.78 crore cards have already been dispatched.
- Pradhan Mantri Krishi Sinchayee Yojana (PMKSY):
One of the primary concerns of farmers in India has been the availability of water for irrigation. PMKSY is government’s flagship micro irrigation program.
Over the years, the budget allocation to the scheme has constantly increased. The scheme had Rs 4,510.55 crore being released in 2014-17, which is 21.92% more than the amount released in 2011-14 (Rs 3,699.45 crore). Recently, an initial Corpus of Rs. 5,000 crore for setting up of a dedicated Micro Irrigation Fund (MIF) with NABARD under PMKSY has been approved. This amount will be spent over the period of two years from 2018-19 to 2019-20.
Not only budget-wise, even the area under micro irrigation projects of PMKSY has also increased over the years. The following figure from the government website clearly shows the trend. We can observe that the physical progress in 2017-18 is more than double than that of 2013-14.
- Farm Credit: Agriculture is one sector where non-institutional lending had been very high. The present government is trying to change that trend. Target for agricultural credit in 2017-18 has been fixed at a record level of Rs 10 lakh crore after distributing a record farm credit in the year 2016-17. This target has now been raised to Rs 11 lakh crore for 2018-19.
Apart from this, opening of bank accounts under Jan Dhan Yojana and the availability of Kisan Credit Cards is helping the poor farmers get access to institutionalized form of credit and increasing financially literacy at the same time.
- 100% neem coated urea: The benefits of using neem-coated urea is multifold. On one hand, the neem coating lets urea to release gradually and acts as a natural insecticide. Another reason why the government gave a push to neem coated urea is to check the pilferage of subsidized urea to the chemical industry.
- Other initiatives:These are some of the main reforms apart from many other schemes like Paramparagat Krishi Vikas Yojana (PKVY) to promote organic farming and agroforestry (Medh Par Ped).
Policies helping farmers after production
The responsibility of the government to the farmer goes beyond the farm to ensure that their earnings are properly taken care of and that they get access to markets easily to sell their produce.
The following major policy decisions are steps in this direction:
- Increase in MSP: In Budget 2018-19, the Finance Minister mentioned that the MSP for all unannounced kharif crops will be at least 1.5 times their production cost like most rabi crops. The production cost here means the entire input costs incurred by the farmer.
- e-NAM: National Agriculture Market scheme, approved on July 1, 2015, started with a target of linking 585 wholesale APMC mandis across the country. Starting with 21 mandis on April 14, 2016, the scheme has now integrated 585 markets across 16 states and 2 Union territories. More than 164.53 lakh tonnes of farm commodities have been transacted on e-NAM and more than 90 lakh farmers have been registered.
The coverage can be seen in the following map from the government website:
What is the relevance of increasing MSP and providing the e-NAM platform? These show the systemic changes that have been taken to ensure that the farmer is not denied his due. One of the primary complains from farmers has been that they are denied the right price for their crops. e-NAM being a digital platform, where payment is done online, ensures that there is transparency and information is available at one source. This provides a system of check and balance for agri-commodities and makes sure that regulations are duly followed. Further, the primary relief to the farmer in the longer run is that the role of the middle-man is going to be curtailed. This ensures that the farmer keeps most of the profit.
- Pradhan Mantri Fasal Bima Yojana (PMFBY): This is one of the flagship schemes of the Modi government. City-dwelling people have easy access to a slew of life and non-life insurance schemes, which keeps them financially secure. Crop production is a time-taking and risk-based activity. Therefore, farmers too need insurance but didn’t have an easy access to crop-based insurance schemes. PMFBY has tried to change that in a big way.
The number of farmers covered in 2014-15 and 2015-16 were 3.70 crore and 4.85 crore respectively, despite these being severe drought years.
In comparison, post PMFBY, in 2016-17, it was 5.74 crore and in 2017-18 it is 4.79 crore, despite both being good monsoon years. In terms of GCA (Gross Cropped Area), 571.54 lakh hectares were covered in 2016-17 and 475 lakh ha in 2017-18.
Allied Sectors getting a boost
Apart from agriculture, the allied sectors like dairy farming, fisheries, among others, are equally important to increase the farmer’s overall income. Sometimes, farmers are engaged in multiple activities. Therefore, the allied sectors are getting an equal impetus from the government.
The budgetary allocation to these sectors has grown over the years as mentioned in a figure above. A comparative analysis of the allocation figures in 2009-14 and 2014-19 shows the following trend:
|Sector||Budgetary Allocation (in crore)||Increase in %|
Kisan credit cards have been extended to fisheries and animal husbandry farmers to meet their working capital needs. Fisheries and Aquaculture Infrastructure Development Fund for fisheries sector and an Animal Husbandry Infrastructure Development Fund for financing infrastructure requirement of the animal husbandry sector have been announced, with a total corpus of these two new funds at Rs 10,000 crore.
India has continued to be the largest producer of milk in the world for the last 15 years and contributes 19% to the world’s total milk production. To capitalise on these gains, the Rashtriya Gokul Mission, a focused project for the development and conservation of indigenous breeds in a scientific and holistic manner, was initiated in December 2014 for the first time in India, with an outlay of Rs 500 crore. Milk production has increased by 18.81% in 2016-17 as compared to 2013-14.
Breaking Production Records
The first two years of the present government saw droughts affecting farmers. But the period of 2016-17 saw a record production of foodgrain, a clear reflection of the systemic changes in the agriculture sector. In the subsequent year in 2017-18, this record has been broken again. The below graph shows this trend:
The high production levels have touched all facets of the agricultural landscape, be it animal husbandry or horticulture crops.
Rather than a linear focus, the present administration came out with a slew of schemes to holistically change the approach to agricultural growth. So, on one hand, foodgrain production did go up to record levels, but so did milk production and horticulture crops. The focus is on working out a diverse approach to doubling farmers’ income by 2022.
The schemes mentioned above shows how production figures can increase, given a concerted and organised effort to engage with the diverse aspects of Indian agriculture. Previously, the only solution to an agrarian crisis for the government seemed waiving the loans in a bid to earn votes or skirt the systemic problems. The present government’s efforts show a clear sign of engagement and vision, which is a welcome change for transforming the agriculture landscape.