News Highlight
As the Government struggles to meet its stated goal of doubling farmers’ income by 2022-23, India’s largest bank, SBI, has released a study.
Key Takeaways of the SBI study
- Farmers Income
- Between the financial years 2017-18 and 2021-22, the average income of farmers rose by 1.3 -1.7 times across India.
- While in some crops like soybean in Maharashtra and cotton in Karnataka, incomes have doubled during the same time.
- Non-farm incomes
- Income from allied and non-farm activities grew by a significant 1.4-1.8 times in line with the increase in farmers’ income during the same period.
- This supports the findings of the 77th National Sample Survey, which found that farmer income sources other than crops have become highly diverse.
- Criticises farm loan waivers
- The SBI report criticises the farm loan waivers announced by various states and the Centre.
- It said since 2014, of about 37 million eligible farmers, only 50 per cent received the amount loan waiver.
- However, in some states, over 90 per cent of farmers received the debt waiver amount.
- Possible reasons for the low implementation rate of these loan waivers
- Rejection of farmers’ claims by State Governments
- Limited or low fiscal space to meet promises
- Change in Governments in subsequent years
- Minimum Support Prices
- Minimum Support Price (MSP), increasingly aligned with market-linked pricing, has been pivotal in ensuring better prices for farmers.
- The MSP has, in many cases, sought to
- find optimum prices,
- fix floor price norms for a wide range of crop varieties (currently 23) and
- gradually encourage farmers to switch to crops of better yield or value.
- Kisan Credit Cards (KCC) scheme
- It said the KCC scheme has been instrumental in bringing many farmers under the ambit of a formal credit mechanism at subsidised rates from institutional players.
- However, the current regulatory norms take a lot of time for banks to renew and extend KCCs.
- SBI estimated that banks use about 2.3 million person-days to renew KCC loans.
- If the norms were eased, this time could have been used to provide new credit to agriculture.
- It suggested a Livelihood Credit Card (LCC) that included a multi-purpose loan covering all rural household activities for ease of business.
- Tenancy Certificates
- The study also called for state intervention to give tenancy certificates to tenant farmers to bring them into the formal credit system.
- It had estimated that there were 20-30 million landless or tenant farmers in India based on its analysis of PM-KISAN and KCC beneficiaries.
- The study also called for state intervention to give tenancy certificates to tenant farmers to bring them into the formal credit system.
- Non Performing Assets of Self-Help Groups
- According to the report, NPAs of more than 800,000 women-led self-help groups (SHGs) in the country constitute more than 10 percent of the total NPAs in India.
- Within this, certain states Uttar Pradesh, Haryana and Punjab, have NPA ratios of over 25 per cent. In contrast, some, like Andhra Pradesh, have the lowest ratio of 0.8 per cent.
The goal of Doubling Farmer’s Income
- In 2016, the Government had set the target of doubling farmers’ income by 2022-23.
- In April 2016, the Government constituted an inter-ministerial committee headed by Ashok Dalwai to look into the issues of ‘doubling farmers’ income’ (DFI).
- In September 2018, the committee submitted a report containing a strategy to double farmers’ income by 2022.
- The DFI strategy recommended by the committee includes seven sources of income growth. They are
- Improvement in crop productivity
- Improvement in livestock productivity
- Resource use efficiency or savings in the cost of production
- Increase in the cropping intensity
- Diversification toward high-value crops
- Improvement in actual prices received by farmers
- A shift from farm to non-farm, a rural household’s activities at doubling farmers’ income
Government initiatives were taken to double farmers’ income
- Pradhan Mantri Kisan Samman Nidhi (PM-KISAN):
- Central Sector Scheme with 100% funding from the Government of India. The fund is directly transferred to the bank accounts of the beneficiaries.
- It provides payment of Rs. 6000/- per year in three 4-monthly instalments of Rs. 2000/- to the farmers’ families.
- Pradhan Mantri Kisan Man Dhan Yojana (PM-KMY):
- Under this scheme, a minimum fixed pension of Rs. 3000/– will be provided to the eligible small and marginal farmers subject to specific exclusion clauses upon attaining the age of 60 years.
- Pradhan Mantri Fasal Bima Yojana (PMFBY):
- It started in the 2016 Kharif season.
- The scheme provides insurance cover for all stages of the crop cycle, including post-harvest risks in specified cases, at a low premium share to farmers.
- Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA):
- The scheme aims to ensure remunerative prices to the farmers for their produce, as announced in the Union Budget for 2018.
Pic Courtesy: Business Standard
Content Source: Business Standard