While agrarian distress is already running high, the Economic Survey (2017-18) has forecasted a further dip in farmer incomes.
Hence, a focused policy framework is needed to reverse these trends.
What are the climate related aspects?
Based on analysis of climatic trends, the Survey has concluded that agricultural incomes could dip in the medium run by 15-18% on average.
More significantly, the number is touted to be as high as 20-25% in unirrigated areas, which comprises almost over half of the Indian farmland.
But efforts to promote climate-resilient agriculture have been lax.
The Survey has hence stressed the need for mitigating this vulnerability through the rapid extension of climate resilient technologies.
Hence, efficient drip and sprinkler irrigation technologies and replacing untargeted subsidies in power and fertilisers have been emphasised.
What are the other aspects?
Unabated shrinking of land holdings due to partitioning and persistent degradation of vital resources (such as land and water) is a major problem.
Lack of adequate diversification of farming towards high-value agriculture, and the rural youths’ disinterest in farming are also important factors.
Effects of these factors on the performance of agriculture are already discernible as gross agri-GDP has remained almost static in the past 4 years.
While the Survey seeks to hold two consecutive poor monsoons in 2014 and 2015 as partly responsible for this, the reality is otherwise.
Notably, rural distress was more pronounced in the subsequent couple of years (2016 and 17), which were years of bumper harvests.
This points the finger at misguided government policies concerning agricultural pricing, for the worsening plight in the farm sector.
What are the pricing flaws?
Price management policies have largely focused on containing food inflation for the benefit of consumers than in safeguarding farmers.
The need, therefore, is to strike a fine balance between the interests of consumers and producers by developing better farm marketing systems.
This requires addressing the existing inefficiencies and deficiencies of the markets run by the Agricultural Produce Marketing Committee (APMC).
The dominance of intermediaries and cartels in agricultural trade needs to be restrained to give way to fair, transparent and competitive marketing.
How does the future look?
The government has committed to double farmer incomes by 2022, but the sector’s projected growth of 2.1% doesn’t seem coherent with this.
Hence, the sector’s growth needs to be several times higher and the survey has done well to counsel the government to diversify income generating avenues.
Mitigating production as well price risks by incorporating allied sectors like livestock and fisheries in farming systems is hence needed.
Equally imperative is the need for greater deployment of science and technology in agriculture, which requires substantial investments.
Hence, avenues for bringing in these investments needs to be created.
