The Gist of Kurukshetra : Double of Farmers' Income: Agriculture Growth and Farmers' Welfare - August - 2017

The Gist of Kurukshetra : Double of Farmers' Income: Agriculture Growth and Farmers' Welfare - August - 2017

Continuing Critical Role of Agriculture in India Agriculture is the principal source of livelihood for about 48 per cent of the population of the country. It caters to the food security of the nation besides generating exportable surpluses. It provides the bulk of wage goods required in non-agriculture sector and most of the raw materials for the industrial sector. Agriculture, with its allied sectors, is unquestionably the largest livelihood provider in India, more so, in the vast rural geographies. It contributes significantly to the Gross Domestic Product (GDPJ1 of the nation's overall economy, though in terms of percentage, it has been declining. This also highlights the need for increasing the size of agri-GDP (agri-GVA since 2012-13)2, so that per capita share of the farmers dependent on the sector improves.
India's agriculture sector has been undergoing a structural change with respect to its farm size, cropping pattern and share in the national GVA.lt would benefit all concerned with policy formulation and implementation, to recognize that agriculture sector is the largest private enterprise in the country. It is logical, therefore, to enable the spirit of private enterprise of the farmers to excel itself. So far, the nation's broad focus has been on achieving higher production and realize food security, which has been done with satisfaction. However, it has also spawned a number of issues that challenge sustainability and one sees agrarian crisis today. In the wake of this, it is more approphate to adopt farm income- centric approach in preference to production at any cost as the basis of agricultural policy. The farmer has to be facilitated to operate his farm-enterprise on the basis of profitable returns.

As per 2011 Agriculture Census, number agricultural workers in the country were 26.3 crore comprising 11.87 crore of cultivators and 14,43 crore of agricultural labourers. This in terms of percentage of the total number of agricultural workers accounted for 45.1 per cent and 54.9 per cent respectively. In comparison, the corresponding figures for the year 1951 were 9.72 crore of total number of agricultural workers, consisting of 6.99 crore of cultivators (71.9 per cent) and 2.73 crore of agricultural labourers (28.1 per cent). It is clear, that not only has there been an increase in the total number of agricultural workers, but also relative to the total number of cultivators, the numbers of agricultural labourers have increased. It is also important to learn from these statistics, that while the percentage of people depending on agriculture has reduced to 48 from the high of 80 in 1951, in terms of absolute figures, the dependency on agriculture sector for employment, income and livelihood has increased.

At current prices, the size of the agriculture GDP (including Agriculture, Forestry & logging and Fisheries) stood at Rs. 19,06,348 crore (Rs.1.90 million crore) in the year 2013-14. Exclusive of Forestry and logging, the size of agri-GDP (including Field Crops, Horticulture, Animal Husbandry & Dairying and Fisheries alone) worked out to Rs.14,95,591 crore (Rs.1.49 million crore).

As a share of the total Gross Value Added (GVA) of the nation's economy at 2011-12 prices, the GVA of agriculture sector has been declining. It has declined from 17.8 per cent in 2012-13 to 17.5 per cent in 2013-14 to 16.3 per cent in 2014-15 and to 15.3 per cent in the year 2015-16. That agri-GVA of 15.3 per cent in the year 2015-16 supported nearly 50 per cent of the population makes it explicit, that the purchasing power of the farmers is at a level less than desired. The percentage of farmers below poverty line in 2011-12 based on total household (farm and non-farm) income in the country was 22.5 per cent and obviously a situation that needs amelioration.

As per 2013 Survey, the average monthly income of the agricultural household at All India level was Rs. 6,426/- and its composition from different sources as a percentage of the total was as follows:

Further, 2013 Survey brought out, that as against the average monthly income of Rs. 6,246- the average monthly consumption expenditure was Rs. 6,223/-. This is reflective of the vulnerability of the farmer in terms of adequacy of his income to meet family expenses and create savings that can be plowed back as investments on his farm.

The changes in the farmers' income are linked in a major way to the growth rates of agriculture sector. During the 11th plan period (2006-07 to 2011-12), the agriculture sector registered an average growth rate of 3.3 per cent as against the target of 4 per cent. The growth rate of the sector during ongoing 12th plan period (2012-13 to 2017-18) has been less than targeted on account of poorer performance in 2012-13 and two severe consecutive droughts in the years 2014-15 and 2015-16. However, the current year, 2016-17 has shown growth buoyancy. Based on 3rd Advance Estimates of production, the year 2016-17 is expected to register a growth rate of 4.3 per cent. The estimated output are 272 million metric tonnes (mmts) of foodgrains and 287 mmts of fruits & vegetables surpassing the earlier respective record of 265 mmts and 284 mmts achieved in the year 2013-14. It is important to register robust and consistent growth rates in the sector in order to keep at bay agrarian distress and raise the farmers' income, so that they are able to realize higher standard of living and also generate savings required. to meet capital investment needs. In the absence of savings coupled with non-availability of required quantum of institutional credit, the farmer is driven to borrowings from money lenders. As per annual reports of National Crime Records Bureau (NCRB), Ministry of Home" Affairs, Government of India, amongst various reasons pushing the farmer to suicide, indebtedness is an important one. As per 2013 Survey, about 52 per cent of the agricultural households in the country were estimated to be indebted and the average amount of outstanding loan per. agricultural household was Rs.47,000/- (approx.).

It is in the above context, that Government of India in its budget 2016-17 declared its commitment to doubling the income of the farmers over the period of 6 years (2016-17 to 2021-22). The budgetary announcement was preceded by the declaration of Hon'ble Prime Minister on 18th February, 2016, at his Bareilly address committing the nation to this goal. As seen from the contents of Table it is reasonable to target the doubling of the income of the farmers, if only all the states are able to register higher growth rates on a consistent basis. Of course, high growth rate in production is a necessary condition, but not a sufficient condition. Greater emphasis is needed on reforms on the post-production segment, so as to enable the farmer to realize greater value & monetary turns on his produce.
Agriculture sector which is defined by biological process, is by its very nature vulnerable to the vagaries of climate which impact the sector adversely. Further, it is also exposed to market uncertainties since production cannot be maneuvered as easily as in the case of industrial production system. This affects the farmers at every stage of production and post-production systems, thereby influencing his income directly. It is, therefore, important to provide support to the farmers and enable them to negotiate such risks & uncertainties without compromising on their family expenditure needs, human dignity and life security.

In order to achieve higher growth rates in any sector including agriculture, some pre-requisites are facilitative policy framework leading to suitable programmes and projects supported by adequate investments from both public and private sectors, that contribute to increased Gross Capital Formation (GCF). It would always be necessary to prioritize sub-sectors for investments and efforts so as to achieve higher growth rates from the sector as a whole. Since agriculture sector comprises various sub-sectors including field crops, horticulture, animal husbandry, dairying and fisheries, it would be important to understand the composition of these sub-sectors and the growth potential that exists in respect of each of these.

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Courtesy : Kurukshetra