Different government agencies have procured 132.08 lakh MT of wheat in Punjab. It is beyond the target set by the Punjab government. The state targeted the procurement of 130 lakh MT of wheat. The mode of payment was direct payment to the farmers. It is known that more than nine lakh farmers in the state have received more than 23,000 crore directly into their bank accounts. Earlier, the payments were made through arhtiyas or middlemen. This year, the minimum support price (MSP) of wheat has been `1,975 per quintal. The government has registered farmers on the Anaj Kharid portal.
It is to be noted that this year Punjab produced around 170 MT of wheat in its 35 lakh hectares of land. But the number of beneficiaries did not increase significantly this year. That increment has been marginal compared to last year. In 2020, the number of beneficiaries was 8.8 lakh farmers. What are the reasons behind the entry of more farmers into the mandis? Bharatiya Kisan Union leader Jagmohan Singh reportedly said that farmers went to mandis instead of the flour millers because of the direct payment system at the mandis. A Punjab Mandi Board source reportedly said that more wheat landed in mandis as the number of private buyers was low due to the pandemic.
On increasing overall farmers’ income
One of the most important challenges that Indian farmers’ have been facing is lack of remunerative prices of agricultural products. The production level is high enough to meet the requirements of the domestic market. The government has also intervened in the sector in different ways. Declaration of MSP for 26 important agricultural products, subsidised fertilisers and seeds to the farmers, subsidised power supply to many and cheap irrigation facilities are some of the steps. Government subsidy in agriculture is present in almost all the developed and developing countries of the world. In India in spite of many advantages, a large section of Indian farmers are in distress.
A few important points on raising farmers’ income
A three-pronged principle was raised by the Prime Minister Narendra Modi in 2016 to achieve the target of doubling farmers’ income by 2022. The three pillars were rise of yields, lower cost of production and remunerative prices of farm produce. But the apparently easy points are actually very difficult to achieve. The economy has been passing through a pandemic situation and economic growth is decelerating. In this situation, doubling the income of farmers within the coming year is not possible. But at the same time, it is the agriculture sector that has not been affected heavily by the pandemic. PVS Suryakumar, Deputy Managing Director, National Bank for Agriculture and Rural Development (NABARD) has pointed out a micro scenario where doubling farmers’ income of a small number of farmers in a small region was possible. According to him, it was possible as several conditions needed for achieving the goal materialised. But in the case of the economy as a whole, it is very difficult to meet all the conditions of achieving the target.
An experiment in a micro level
In the micro project where on an average each project encompassed nine villages and 1400 volunteer households. The actual project cost was `20 crore with convergence grants of 6 crore (30%), beneficiary contribution of `7 crore (355) and bank loans of `7 crore (35%). The farmers’ base line annual income was `64,000 (actual range is between `41,000-1,13000). In that project, the income got enhanced by 40-80%. What was the reason behind income enhancement?
Suryakumar mentioned that each project began with selection of improved crop varieties, crop combinations and adapting appropriate agronomic practices and regular seed replacement. It also included farm banding, mulching, moisture conservation and life saving irrigation etc. They were also involved in dairy cattle, collective utilisation of farm machinery, collective input purchase and output marketing. Therefore, it is clear that their success came as a result of several utilization techniques of many suitable factors.
What would happen in the macro situation?
In the agriculture sector, it is not just production and pricing and sale related matters. Farmers face several risks. Most of the farmers have to sell their produce immediately after the harvest due to various reasons. They also face problems related to grading, processing of products and their storing. Helpful banking facility is needed. There is a need to have efficient farmer producer organizations. Therefore, increasing farmers' stable income needs to address all these problems and this is not an easy job for the government.
Increasing off farm activities
How many of us know that most of the farming communities have been living through off-farm income resources? On the basis of a Canadian experiment, famous economist A M Fuller stated in 1991 that, “Full-time farming is the aberration in modern farming history as multiple jobs holding among farm households is the norm.”
The ICRISAT village level studies indicate that in the semi-arid regions of India, agricultural income out of the total income has been falling drastically (Participation of Rural Households in Farm, Non-Farm and Pluri Activity: Evidence from India by S Subramanian, 2018). In India, it is believed that close to 60% of the total workforce is now engaged in non farm activities and according to census 2011, it was 45%. The off-farm activities have been rising because it supplements family income outside agriculture, spreads risk, stabilises salaries, reduce income inequalities and maintains resources for farming and other financial obligations.
So, increasing farmers’ income is not a matter related only to agriculture. It depends on the total prospects of livelihood in the rural sector as well as the health of the economy.