While the 14 volumes of the Dalwai Committee Report on doubling farmers’ income provided a road map for the country to transition from a mere Green Revolution to an Income Revolution for farmers, the country has yet to solve the ‘Riddle of Agriculture Distress.’
Background: Agrarian reform is required.
- Agriculture currently contributes approximately 15% of national output and employs approximately 50% of the population directly or indirectly.
- Farmer dissatisfaction is a real and pressing issue, as evidenced by the protests currently taking place across the country.
- Historically, government policy focused on increasing agricultural output and improving food security rather than recognising the need to increase farmer income.
- Low global prices have harmed exports, while cheaper imports have harmed domestic prices.
- Natural disasters and crop losses cause rural households to become impoverished.
- Increasing demographic pressure, disguised agricultural employment, and conversion of agricultural land for alternative uses have all contributed to a significant decrease in average land holding.
- Agriculture Sector’s Challenges
- Institutional Agricultural Credit vs. Non-Institutional Agricultural Credit: Historically, rural agrarian credit needs were met primarily through moneylenders, resulting in large-scale indebtedness.
- Small land holdings: The land is fragmented, and 87% of farmers are subsistence farmers.
- Low productivity: Indian farms are smaller (1-2 hectares on average), making economies of scale more difficult to achieve.
- Low mechanisation: It is low, and Indian farmers do not use many high-yield input varieties used in other agricultural producing countries.
- High logistics costs: India’s logistics costs are currently around 14% of GDP, which is higher than developed-country exporters such as the US (9.5%).
- Limited value addition: India exports more primary commodities than value-added agricultural products; the country ranks 10th in processed meat, 18th in processed fruits and vegetables, and 35th in dairy.
- Low value addition can be attributed to a lack of private sector investment and adequate incentives.
- Procurement: In 14 years, FCI/state agencies did not procure 69 to 73% of the rice and wheat produced.
- The Food Corporation of India (FCI) and state government agencies are two of the main platforms available to farmers for the sale of agricultural produce, but they cannot be a complete substitute for an efficient marketing system, according to the fourth volume of the Dalwai Committee Report on doubling farmers’ income.
- Lack of APMC markets: These markets do not exist in five states: Bihar, Kerala, Manipur, Mizoram, and Sikkim.
- Furthermore, no APMC market exists in the UTs of Andaman and Nicobar Islands, Lakshadweep, Daman & Diu, and Dadra & Nagar Haveli.
- Infrastructure scarcity: Another important factor that is being overlooked is the poor state of infrastructure in these markets. Only 15% of APMC markets have cold storage facilities. Only 49 percent of the markets have weighing facilities.
- ICAR and Saus should create farming system models for various socioeconomic and biophysical settings, combining all of their technologies in a package with a focus on farm income.
- Combining technology and best practises for production, protection, and post-harvest value addition for each subsystem with other subsystems such as crop sequences, crop mix, livestock, horticulture, and forestry.
- Such a shift necessitates an interdisciplinary approach that builds on knowledge from all disciplines.
- Better price realisation, efficient post-harvest management, competitive value chains, and the adoption of allied activities can easily account for one-third of the increase in farmer income.
- This necessitates comprehensive market, land lease, and tree-planting reforms on private land.
- Agriculture has suffered as a result of a lack of modern capital and knowledge.
- Agriculture must be liberalised in order to attract responsible private investment in production and markets.
- Similarly, FPOs and FPCs can play an important role in the promotion of small farm businesses.
- Precision farming: There is growing evidence that agronomic practises such as precision farming can significantly increase farmer production and income.
- Export markets of interest: Identify markets with high export potential for competitive value chains and enter into beneficial bilateral or multilateral trade agreements with them, increasing sanitary and phytosanitary production levels to meet their quality standards and negotiating non-tariff barriers with them.
- Address Value Chain Clusters (VCC) holistically, with a focus on value addition: The clusters would also serve to converge the government’s spends and schemes, as well as seek any additional funding required, for building the necessary infrastructure at competitive costs for value addition, promoting R&D, and promoting “Brand India” in global markets.
- Similarly, modern machinery such as laser land levellers, precision seeders, and planters, as well as practises such as SRI (system of rice intensification), direct seeded rice, zero tillage, raised bed plantation, and ridge plantation, enable technically efficient farming.
- However, the marketability of these public-sector-developed technologies is extremely low.
- They require significant extension in order for farmers to adopt them.
- Technological advancements, as well as price support measures and the provision of subsidised key inputs such as irrigation, fertiliser, and electricity, have all played an important role in the expansion of Indian agriculture.
- A policy shift from price support to income support through the Direct Benefit Transfer (DBT) programme is preferred because it would incentivize farmers by transferring money to their bank accounts while also bringing much-needed efficiency in input use.
The government should shift its focus away from solely providing price support to farmers and instead focus on improving infrastructure, reducing the gap between farmers and the market, land reforms, policy reforms to increase the flow of credit to farmers, establishing food-processing industries for perishable goods, improving irrigation facilities, and so on, so that agriculture emerges as a viable means of sustenance.