Higher farm incomes, a mirage

All the debates and discussions around doubling farmers’ income in the next five years offer nothing new. The arguments invariably revolve around the same failed strategy -- increasing crop productivity and reducing the cost of production.

What is more surprising is that those who talk of allowing markets to provide higher farm incomes are the ones who have no faith in the markets when it comes to their own income. They get a fixed salary packet every month. They never thou­ght of reducing their own cost of living to bring down the ever-growing salary expenditure.

The minimum wages that employees get are computed as per the recommendations of the Indian Labour Conference (ILC), 1957. Accordingly, it should be based on the minimum human needs, for which a set of norms have been laid out: 1) three consumption units for one earner in a standard working family, with the earnings of woman, children and adolescent in the family being disregarded; 2) Net intake of 2,700 calories for an average Indian adult of moderate activity; 3) Per capita consumption of cloth of 18 yards per annum, which would mean for an average workers family of four a total of 72 yards; 4) Rent corresponding to the minimum area provided for under the subsidised industrial housing scheme for low income groups; and, 5) Fuel, lighting and other miscellaneous items of expenditure to constitute 20% of the total minimum wage.

Subsequently, in an order issued by the Supreme Court in 1991, it laid out a set of six criteria for working out a minimum wage: children’s education, medical requirement, minimum recreation including festivals, ceremonies, provision for old age and marriage should constitute 25% of the wage. Further, it stipulated the minimum wage to include a dearness allowance compensating for inflation.

The criteria that provides assured income to economists, scientists and planners is something that is completely ignored when it comes to the farmers. This smacks of double standards.

It is primarily to address the extreme levels of inequality that prevails, and which is perpetuated by an economic design and has nothing to do with crop productivity.

For several years now, there has been a demand for a separate farmers’ income commission that provides an assured take home income package to farmers every month.

If crop productivity is the reason for farm crisis, I see no reason why Punjab farmers should be committing suicide. With a productivity level of 45 quintals per hectare of wheat and 60 qui­ntals per hectare of rice, Punjab tops the global chart. And des­pite having 98% assured irrigation, there is hardly a day when farmers don’t commit suicide.

So using the same criteria that the Supreme Court had laid down in 1991, and also following the same decent living norms prescribed by the ILC, a few of us — economists, researchers, and agricultural activists — came together for a workshop in Hyderabad in December to work out an income security model for farmers.

This was followed by another workshop in Kerala — in which 10 economists and policy researchers participated —in the first week of January to ascertain the payment that farmers deserve for the ecosystem services they protect while undertaking crop cultivation. Led by the United Nations, measuring ecosystem services is now becoming a global norm in computing what is called the green economy.

Assured income package
While farmers and many civil society organisations have been demanding the implementation of Swaminathan Committee report which proposed 50% profit over the cost of production, what is not being realised is that since only 6% farmers get the benefit of MSP, there is no mechanism to support the remaining 94% farmers.

My idea of providing farmers with an assured income package every month also includes the 94% of the farming community who have been suffering silently all these years. The minimum support price will certainly remain as one of the ways to provide a guaranteed income to farmers. But we have to work out other ways to provide assured income to rest of the farming community.

When the lowest government employees are ensured of a monthly pay of Rs 18,000 per month, and the non-agricultural workers with a daily wage of Rs 351, the state cannot ignore and leave the food producers of the country with meagre incomes.

The economic loss farmers suffer every year works out to Rs 12 lakh crore. This is the huge price the farmers pay for subsidising the nation by providing cheap food. By using ecosystem services approach and the internationally accepted norms for monetising ecosystem services, farmers share in caring and protecting the environment and biodiversity justifies payment to the tune of Rs 14,000 per hectare.

This is a conservative estimate, and should form the basis for doubling farmer’s income. The time therefore has come to look beyond crop productivity, contract farming and privatisation of marketing structures as the way forward to double farmer’s income. Unfortunately, economists have mistaken public and private sector investment in farming as income generation. Policy thinking has to shift to providing direct income support to farmers.

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