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LATEST NEWS UPDATES | Will Budget help double farmers' income? -Vidya Venkat

Will Budget help double farmers' income? -Vidya Venkat

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published Published on Feb 6, 2017   modified Modified on Feb 6, 2017
-The Hindu

Most of the earnings of the average farm household were spent in meeting consumption expenditures.

Finance Minister Arun Jaitley announced a slew of measures in the Union Budget 2017 to boost the agriculture sector. Higher agricultural credit, higher allocation for irrigation projects, a crop insurance scheme and increased allocations for MGNREGA to dig farm ponds were among the measures announced on February 1. But will these help attain the goal of doubling the farmer’s income by 2022, as Prime Minister Narendra Modi had first suggested last year?

The average monthly income of the Indian farm household was estimated to be about Rs. 6,426 by the Situation Assessment Survey of Agricultural Households in its NSS 70th round. This included net receipts from cultivation, farming of animals, non-farm business and income from wages. During the same period, the average monthly consumption expenditure per agricultural household was Rs. 6223. What this shows is that most of the earnings of the average farm household were spent in meeting consumption expenditures. For cultivation-related expenses, the farmer is mostly dependent on loans and the NSSO survey revealed that half of the farm households were neck-deep in debt.
 
‘Commodity pricing’

For any real increase in income, farmers require higher returns for their produce. In a statement issued on the Budget, Professor M. S. Swaminathan, founder of the M.S. Swaminathan Research Foundation noted that it was high time that the recommendations of the National Commission on Farmers - to provide the minimum price of the total cost of production plus 50% - are implemented. Speaking to The Hindu, the agriculture expert said that in the case of rubber, for instance, a price stabilisation fund was established which helped farmers get better prices for their produce. He suggested that similar measures be introduced for other farm produce as well.

“As far as the farm loans are concerned, the agricultural credit is mostly netted by large companies. Also nearly 50% of farmers are women, who often do not benefit from credit policies as they do have land titles in their name. Unless land titling recognises female ownership of land for cultivation, half of India’s farmers cannot claim institutional credit,” he said.

Professor R. Ramakumar, Dean of School of Development Studies at Tata Institute of Social Sciences, Mumbai, said chasing the goal of doubling incomes lacks clarity as to whether it is nominal incomes or real incomes that are being chased. It is also unclear whether it is income from agriculture or that of agricultural households being targeted.

“Agriculture will have to grow at 12 or 14% to realise such rise in earnings,” he said. At present, the growth rates stand at a poor 1.2%, according to World Bank data.

“The problem of economic viability of farming is one of rising input prices such as for fertilisers, pesticides and seeds and stagnating output prices as MSP is not rising. Further, protectionist barriers for Indian farmers are much lower now and there is little increase in expenditure for agriculture.”

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The Hindu, 5 February, 2017, http://www.thehindu.com/business/agri-business/Will-Budget-help-double-farmers%E2%80%99-income/article17198101.ece?homepage=true


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