Need for improving conditions of farmers

shubham sharma
[ June 14, 2017 ] The social implications on farmer families facing such a scenario are immense. The agitations in various states, including Madhya Pradesh, are only indicators of this structural crisis. So what is the solution? India must urgently rethink its agricultural land lease policy. It should ensure that land tenancy laws are immediately transformed, allowing farmers to lease out their land even for long periods without the fear of losing ownership. Easy-to-use administrative mechanisms can be used to restore the land to the owner on termination of the tenancy. Linking land records to Aadhaar could make such mechanisms transparent and easy to administer. Once land leasing is made legal and systems easily enforceable, enterprising farmers would ‘lease in’ to make their ‘operational’ holdings larger and bring in scale economies, with the owners of the land having the comfort of retaining their land.A more definitive correction would be to ensure that farm land does not get fragmented below a certain viable minimum. The next step would have to be a change in inheritance laws, making agricultural land to be inherited by only one descendant, and not fragmented among all the siblings.The Niti Aayog recently came out with its ‘Three Year Action Agenda’ – a plan that covers a time period that is politically crucial as it leads up to the 2019 Lok Sabha elections.Although there is nothing radically new in what has been suggested by the Niti Aayog, the measures proposed are in the right direction if the farmers’ incomes have to be doubled. However, various experts have cast a pall of gloom over the claim that is indeed possible to double incomes by 2022-23. This is primarily because agricultural growth in the post-reform period, barring a few exceptional years, has been stagnant and has historically failed to meet the target set by the government. For example the average annual rate of growth in agriculture and allied sector during the period from (1991-92 to 2013-14) comes at 3.2% – lower than the targeted 4%.The four point action plan includes the following measures: 1) Remunerative prices for farmers by reforming the existing marketing structure; 2) Raising productivity; 3) Reforming agriculture land policy; and 4) Relief measures. It is important to see how these actions will double the income of the farmers’ and to what extent the government is serious about it.The MSP regime in India has been a subject of heated debate in recent years. MSP is not only increasing year by year but since the mid-1990s the rise in the MSP has been sharper than the rise in consumer and wholesale price indices. The major disadvantage of MSP regime is that it totally ignores the demand dimension, thereby resulting in not only an inefficient use of resources but also accumulation of unwarranted stocks of cereals. Since resources for agriculture – water and land – are scarce, it is very important to use the resources efficiently if our aim is to double the income of the farmers.The Niti Aayog has aptly highlighted the distortion in cropping patterns caused by MSP regime. Since the MSP regime favours cultivation of wheat, rice and sugarcane, not only has it led to reduction in the area under acreage of other crops like pulses, oil seed and coarse grains but it has also led to, as highlighted above, accumulation of unwarranted stocks of cereals. While the Economic Survey of 2015-16 pitched for replacement of SP/procurement based PDS with DBT and freeing the market control on domestic movement and imports, the Niti Aayog, on the other hand, has suggested a system of “price deficiency payments” to cure the distortion caused by the MSP regime.Under this system a subsidy would be provided on targeted produce in case the price falls below MSP-linked threshold. One advantage of this, as highlighted by the action plan, is that it would spread price incentives to producers in all the regions and all the crops considered important for providing price support.Lastly the Niti Aayog has suggested bringing in far-fetched amendments in tenancy and leasing law so that small farmers who wish to lease their land do not face any hurdle. In this regard the think-tank has prepared a model Land Leasing Law. But again, since land is a state subject, response from the states has not been encouraging in this regard. On relief measures, the Niti Aayog has suggested many modifications in the existing Pradhan Mantri Fasal Bima Yojana. The action plan has suggested that the scheme should have a capped subsidy amount per farm household and any farmer desiring to insure larger sums should pay full premium for the difference. Secondly, the plan has also suggested extending the time period of coverage under the scheme for three to five years so as that coverage extends to both good and bad years. Both suggestions are good suggestions and there does not seem to be any problem to accept the same.Doubling agricultural income by 2022 is a mammoth task. It is also one that is the need of the hour. With majority of the country’s population dependant on agricultural activities, no true development can be said to be meaningful unless it incorporates the needs of this sector. Increasing farmer suicide rates and increasingly erratic weather patterns further add to the problem. There are, of course intense complexities. Nonetheless, the focus of the government on this sector is much needed. The walk to doubling income is a long, tedious one. But at least a step has been taken in that direction. We now need to ensure that the implementation by all stakeholders is uniform, effective and done whole heartedly.