The government has released a seven-point plan to double farmer income by 2022.
The package has some glaring deficiencies.
What are the flaws?
No New Ideas - The plan is little more than a mere repackaging of the ongoing agricultural development schemes.
Productivity - It is focused more on raising farm productivity than on improving the profitability of farming.
This disregards the fact that higher farm output does not necessarily lead to higher income.
Bumper harvests have in fact often caused a slide in prices.
Marginal Farming - Income from increasing output can at best be only marginal because land holdings of most farmers are too small.
Thereby, they can’t produce sizeable marketable surpluses.
Growth Rate - Doubling of income by 2022, from current levels would require an estimated income growth of over 10% annually.
Such acceleration is hard to come by through the productivity route alone.
What are priority areas?
More emphasis on various lucrative farm and not-farm economic activities that find a passing mention in the plan is needed.
These can include, among others, high-value farming involving horticulture, floriculture, herbal farming and farm forestry.
Allied activities, including novel ventures such as rabbit and quail rearing can also be promoted.
Waste reduction and value-addition of farm produce with effective market support could help enhance incomes.
Also, the creation of off-farm employment in rural sectors needs to be established.
What are the policy changes required?
A stable policy regime governing agricultural pricing and trade needs to be established.
Trading - The current pricing policies seem to have a pro-consumer bias, dictated chiefly by the need to keep inflation down.
This spurs uncalled for interventions such as frequent opening and shutting of imports and exports of farm goods and imposition of stockholding and other curbs on trade.
This needs to change to ensure a balance of produce and consumer interests.
Prices - As minimum support price (MSP) mechanism has failed to show results, it needs to be supplemented with other measures.
One such is the price deficit reimbursement scheme of Madhya Pradesh that seeks to compensate farmers for any shortfall in realising the MSP.
