What is the issue?
- Farm distress is likely to be a major aspect in the upcoming Union Budget.
- In this context, schemes piloted by Madhya Pradesh and Telengana government to ease farmer woes is worthy of discussing.
What is the scenario in the sector?
- Agri-GDP growth has fallen to around 2% per annum in recent years and the real incomes of farmers have fallen as well.
- The sector’s growth is much below the government’s target in production and in doubling farmer incomes by 2022.
- With assembly elections in 10 states due later this year, the states going to the polls are making attempts to woo farmers.
- While some have announced loan waivers, others are trying to fix farmers’ financial distress emanating from tumbling farm prices.
What is Madhya Pradesh’s Scheme?
- Bhavantar Bhugtan Yojana - BBY is a “price deficiency payment” (PDP) scheme, being undertaken by the government of Madhya Pradesh.
- BBY assures that farmers at least get the MSP value for their crops.
- 8 kharif crops namely Soybean, maize, urad, tur, moong, groundnut, til, ramtil are covered under the scheme.
- The Structure - Under the scheme, farmers will have to first register on a portal and their sown area is then verified by government officials.
- Subsequently, the farmer allocated a time slot to bring his produce to the mandi, where the quantity eligible for deficiency pricing is determined.
- The quantity is determined based on the average productivity of the particular district and the cropped area of the particular farmer.
- The farmers receive the difference between “average sale price” (market price) and “minimum support price” (MSP), directly into their bank accounts.
- It hence provides an alternative to physical procurement of commodities at MSP, which comes with the hassles of storage, transport and marketing.
- The Problems - Only those farmers registered on its portal gets benefited.
- Financial burden will be more than 90% of the state’s total agri-budget, rendering BBY unfeasible.
- The Haryana government too has announced a somewhat similar scheme for vegetables but it does not even cover the full cost of production.
What is Telangana’s Scheme?
- The government of Telangana is piloting an "Input support scheme" modelled on the line of EU's "single payment scheme".
- The Structure - It involves paying Rs 4,000 per acre to every farmer twice a year for the kharif and rabi seasons.
- The payment is mainly to cover the cost of major farm inputs such as fertilisers, seeds and pesticides.
- It is also to relieve farmers from taking loans from moneylenders.
- This doesn’t require the farmer to register his cultivated area and the farmer isn’t constrained by crop choice or sale timelines.
- This model is crop-neutral, more equitable, more transparent, and gives farmers the freedom to choose.
- The Problems - It is being linked to land ownership. Thus it automatically leaves out tenant cultivators of such input supports provided.
- The payments are on a per-acre basis. Thus a sizeable share of the payment will go to undeserving large farmers and absentee landowners.
- There is no provision to ensure that the financial aid is actually utilised for purchasing farm inputs.
- Thus the programme needs modification to lend income support to those who are actually engaged in agricultural activities.
Source: Indian Express
