A tough task for the new government will be meeting the aspiration of farmers, who are deeply indebted and often suicide prone.
Rural distress has grown in recent years as the monsoon failed twice, while heavy hailstorms damaged an intervening rabi, or winter-sown, crop, which made farmers restless and politically active.
India’s impoverished farmers have the same wish list from the new government which they had for every previous regime: Better prices for their produce, improved irrigation facilities, cheaper inputs like seeds, fertilizers and pesticides, and significantly higher procurement by official agencies.
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The PM-KISAN scheme, which gives direct cash benefit of Rs 6,000 a year to small and marginal farmers, has helped the most impoverished farmers, but they are asking for much more.
More importantly, they pray for good weather, which is by far the biggest driver of incomes in rural India, which is home to two-thirds of India’s population but contributes barely 15% of the country’s Gross Domestic Product.
Analysts and farm leaders say farmers need close coordination of the state and central governments, as both have a strong bearing on agriculture. “Agriculture is a state subject. If state governments don’t take any initiatives, things may not move that fast. Few state governments have offered loan waivers and the centre has floated direct cash benefit to farmers which is a good step. Cash benefits are a good ‘idea’ to help farmers fight distress,” said Madan Sabnavis, chief economist, CARE ratings.
Volatile prices of agricultural commodities are a major reason for agrarian distress. Prices steeply fall immediately after crop harvest when majority of farmers sell their produce. However, the end consumers continue to pay higher price, giving fat margins to middlemen. As a result, efforts to raise agricultural output do not help farmers much.
“Developing and liberalising markets should receive high priority as volume of produce from different parts of the country has increased manifold. Government should gradually withdraw from fixing agricultural prices and their procurement. Attract organised private sector to develop agricultural markets. Let market decide prices and government may compensate farmers in case of steep fall in prices of key agricultural commodities,” said PK Joshi, Fellow, National Academy of Agricultural Sciences.
Vijay Sardana, an agribusiness expert said that the Centre in collaboration with state governments should develop marketing infrastructure for agriculture along major highways to ensure easy market accessibility.
“The Centre should set up warehouses with grading facilities along the highways with the support of state governments. These warehouses should be linked to processing units to give an easy marketing access to farmers. This will solve the ‘point of sale’ problem of farmers and they can get better remuneration for their produce without much transportation cost,” he said.
He said that the government should also review the existing export import policies and frame them in the interest of farmers.
“Minimum Support Price (MSP) trade policies should be linked in harmony. Policies should ensure that Indian farmers get better realisation of their produce. If domestic prices are ruling higher than global prices, duties should be imposed to safeguard the interest of farmers,” he said.
Experts said farmers also need job opportunities away from the fields.
“In the long run, a large number of farmers need to move out from agriculture for better employment opportunities. This will help in expanding per-capita land holding to generate a decent income. We should set up Industrial Training Institutes (ITIs) in rural areas to train youth in agriculture related skill sets and ancillary works which will lead to farm mechanisation and use of modern technology in agriculture. This will also stop exodus of rural population in search of jobs,” said former agriculture secretary PK Basu.
More than 86% holdings have land less than 2 hectares. This group has tiny marketable surplus; they have high transaction cost and low bargaining power.
“These farmers should be incentivise to form farmer producer organisations, self-help groups or cooperatives and promote contract farming and develop vertical integration. The Centre should incentivise states to implement already developed Model Land Lease Act to give larger land parcels for better resource utilisation.