Need to focus on minimum living incomes for farmers

The National Crime Records Bureau’s data for 2013 is out, and farm suicides are pegged at 11,772 -- not very different from the earlier years.Many activists point out how these figures are in fact under-reported.

In a country where the cultivators’ numbers are plummeting drastically as the Census 2011 data shows, this unabated trend of farm suicides is something that any government should take note of.

The central aspect to this is the poor returns in agriculture, especially as measured by net farm incomes.
The only time that farm incomes have been measured in India, as part of the NSSO’s Situation Assessment Survey of Farm Households in 2003, the findings showed that an overwhelming majority of farm households have their monthly incomes lower than their monthly expenditure and in absolute amounts, a national average monthly income (from all sources) per farm household of just Rs. 2115.

Average monthly income from cultivation, for all sizes of landholdings, was a meager Rs 969 which is around Rs 385 per month per capita.

Compare this with legal minimum wages for unskilled workers in agriculture at Rs 90.81 in December 2003.

All evidence related to farm incomes in India is showing that it is low, stagnant or even declining and also insecure/unstable, despite budgetary outlays of nearly Rs 98,000 crore on agriculture and rural development on an annual average basis.

However, ensuring minimum living incomes has not been made an express objective for all the expenditure being made by the government.

It is important for the government to realise that its dream of GDP-led development cannot be actualised if the purchasing power in rural India is not improved.

In fact, even within agriculture, if the government is keen on farmers investing some more on their agriculture, to improve efficiency and productivity, unless some living margins are created first by ensuring minimum net incomes to all farm households, this will be a distant dream.

Further, the widening inter-sectoral disparity is not healthy for any society. The Peasant Rights Charter that is right now under discussion in the United Nations makes a mention of minimum living incomes as one of the rights due to all peasants.

While several factors determine the incomes accruing to farm households (yields, weather conditions and disasters, prices and favourable markets, costs incurred in cultivation etc.), it is apparent that all government investments have to manifest themselves as enhanced net incomes for farm households.

The end goal has to be the (improved) economic well-being of cultivators.

This is something that India as a nation has accepted, when it adopted the National Farmers’ Policy in 2007.

This policy made a marked shift in discourse by emphasising that production and productivity cannot be the sole parameters by which the nation judges its agricultural performance or even sets its goals and targets, but the economic well-being of farmers as a central element. However, no new concrete steps have been taken to actualise this shift in goals.

Need of the hour

The focus on farm incomes is present in countries like China and Sri Lanka.

If they can do it, there is no reason why India cannot. What is needed is a Farm Income Commission mandated with recommending minimum living incomes (pegged at at least minimum wages to begin with), assessing periodically farm incomes being realised (this can be added to the comprehensive scheme assessing cost of cultivation by improving the sample related aspects of the scheme, in addition to 3-yearly Situation Assessment Surveys by NSSO), and recommending concrete steps to make good the deficit if any.

For the latter, the government may not need to spend anything more than what it is already spending in the form of numerous programmes and schemes, other than improving on the existing interventions in a focused manner and only in some instances, in an expanded manner – credit, insurance, production-related agricultural missions, improved price and procurement mechanisms etc.

In fact, focusing on reducing cost of cultivation by promoting agro-ecological practices is also a good way of enhancing net incomes, and this will also bring down the public financing burden on the government on components like chemical fertilizers.

Additional incentives like Payments for Eco-System Services rendered by organic farms, should surely improve net incomes of farmers.

The Union agriculture minister in his first pronouncements after assuming the post, tried to explain to journalists how the focus should be on farm incomes and not just on prices.

He talked about a new scheme to be launched on farm income insurance.

A word of caution on this scheme – if it is a scaling up of the 2003-04 pilot scheme tried out by the earlier NDA government, which will not ensure minimum living incomes for farm households.

Threshold incomes pegged at rolling averages of past few years are no guarantee that living incomes will be delivered, especially in areas where the yields are low for various reasons and prices are also low, since the 2003-04 pilot was designed around the insurance product taking into account yields and prices in an area.

Any such farm income insurance scheme has to be against guaranteed living incomes to all farm households.

More important is an overarching institutional mechanism in the form of a Farm Income Commission to ensure that our ‘anna daatas,’ keeping the nation alive, are provided with dignity and profitability in their profession.