Doubling farmer inco-mes in the next five years” was the promise with which finance minister Arun Jaitley began his 2016-17 budget speech on Monday.
What does this means to 263 million people (54.6 per cent of the working population) deriving their livelihood from farming today?
The increasing costs of cultivation and stagnant prices (when corrected to inflation), increased costs of living and decreasing support has led to the continuous decline of farm incomes.
The National Sample Survey 70th round (2014) estimated that the average income of farmers was Rs 6,426 per month, which is often lower than their monthly expenditure. Let’s see what the Vudget offers the farmers.
Total allocation for the sector is Rs 35,984 crore, a substantial increase from the previous year. The focus seems to be in creating infrastructural support in the form of creating irrigation, storage and processing facilities and establishing a unified market, which together will lead to the increase in farmer incomes.
The growing indebtedness in agriculture is due to low access to institutional credit. The budget targets Rs 9 lakh crore to the farm sector with an interest subvention of Rs 15,000 crore. This will marginally increase the credit access from the current 21%.
The allocation of '5,500 crore to the Pradhan Mantri Fasal Bheema Yojana is a silver lining which may help more farmers to get cover. The substantial allocations for irrigation and ground water management will help farmers in rainfed areas.
The key question about the strategies to increase farmer incomes remains unanswered. If their incomes have to double, the annual growth rate has to be at least 14 per cent. This seems impossible given that the increase in MSP across commodities in the last two years is 3-6%.
Even if we assume that the current trend will continue and somehow farmers’ incomes will double in the next five years, it will remain at about Rs 12,000 per month on average in 2022 which will be half of the current income of the lowest paid government employee. There’s no hope on the horizon for farmers as yet.
