Suggest ways and measures to double farmer’s income by 2022.

Doubling of Farmers Income by 2022 is one of the key targets for India. To accomplish this agriculture output must grow at 10.4% annually. But the current agriculture output growth rate is around 3 per cent annually. At this pace, it will take 25 years to double farmers’ income.

Interventions to Double Farmers Income

Building Cold Storage and Warehouses

In India, nearly 20 per cent of fresh produce is wasted because of lack of adequate cold storage facilities. Reducing waste of perishable fruits, vegetables, and milk, that command higher market prices than staple crops will augment farm income.

Small farmers in India do not risk growing perishable crops and seldom venture to grow high-valued crops due to the lack of storage facilities.

Only 22.2% of marginal farmers (with less than one hectare of landholding size) and 23.6% of small farmers (between one and two hectares of landholding size) grow high-value crops.

From shifting to high-value crops Small and marginal farmers are likely to gain immensely.

Linking Domestic Market with International Market

India allows restrictive exports of farm produce and imposes higher import duties on agricultural products. These tariff and non-tariff barriers are used as tools to tame domestic price, enable food security, and ensure the livelihood of Indian farmers.

But these restrictive agricultural practices coupled with lack of adequate storage facilities often lead to crop output getting wasted.

Hence India needs to follow a liberal trade policy and put in place the necessary infrastructure to facilitate exports. Infrastructure like testing facilities that provide sanitary and phytosanitary certification must be developed since the numbers of such testing facilities are limited. Likewise, agriculture tariffs should be brought down to allow imports at the time of shortages.

Supply-side interventions

Irrigation coverage on small landholding size is less than 40% in India. Supply-side interventions like building rural infrastructures such as village electrification and canals will help farmers. Another supply-side intervention can be APMC reforms.

Financial literacy

The first-ever national benchmark survey of financial literacy and financial inclusion conducted by the National Centre for Financial Education (NCFE) in 2015 which captured a broad array of information from 76,762 respondents highlighted that the farmers are not aware of basic financial products: Less than 1.67% of the farmers are aware of crop insurance products. The corresponding numbers for cattle/livestock insurance and agricultural futures are 0.66% and 0.38%, respectively.

Lack of financial awareness has adversely affected the growth and deepening of agriculture finance markets.

e-mandis

An online market like e-mandis must be developed where farmers can bypass the middlemen and sell directly to the retailers. Evidence from Rajasthan suggests that because of the introduction of an e-market, farmers witnessed a price premium of 13%. But at present, e-mandis are catering to only 7% of all Indian farmers and handle only around 2% of the total value of the country’s agricultural output.

Need for Long Term Measures

The farm loans may help any only in short term. To address the long-pending challenges of the farming sector, it is important to undertake these aforementioned policy measures which will make a real difference to the life of poor farmers.

Topics: GS-III: Inclusive Growth and Issues Arising From It