Context: 

The Prime Minister shared his dream in 2016 to double farmers’ incomes by the year India completes 75 years of Independence and enters Amrit Kaal. As we have entered Amrit Kaal, it is time to revisit the dream to determine if it has been achieved and how best to proceed if it has not.

Focusing on Agriculture:

• It was a noble dream because unless the incomes of farmers go up, we cannot have sustained high growth of overall GDP. 
• Agriculture engages the largest share of the workforce. So, focusing on agriculture, even if it was in a dream, is the right way to ensure long-term high growth of the overall economy.
• Agriculture also has to provide food and nutritional security to the largest population on this planet. 
• However, it must encompass policies that also protect the basic resources of this planet, say soil, water, air and biodiversity. 

Evaluating the Impact of Agricultural Subsidies in India

• The government provides subsidies to farmers in the form of fertilisers, crop insurance, credit, irrigation, and machinery.
• The combined budget for these subsidies is over Rs 4 lakh crore per annum.
• An audit of these subsidies should be conducted to evaluate their impact on farmers’ incomes and the environment.
• Input subsidies can raise farmers’ incomes, but output trade and marketing policies can suppress them.
• Policies such as the ban on exports of wheat, export tax on rice, suspension of commodities from futures markets, and imposition of stocking limits can lead to implicit taxation of farmers’ incomes.
• The current policy framework is pro-consumer rather than pro-farmer, which is a fundamental problem.

Ways Forward:

• One is to realign these support policies keeping in mind environmental outcomes. 
• Millets, pulses, oilseeds and much of horticulture could perhaps be given carbon credits to incentivise their cultivation. They consume less water and fertilisers. 
  • We need to make subsidies/support crop-neutral. 
• Secondly, we need innovations in technologies, products, institutions and policies for more diversified high-value agriculture that is also planet friendly.

Conclusion:

To double farmers’ income, we need to increase productivity through better seeds and better irrigation. It will have to be combined with unhindered access to the best markets for their produce. Further, diversifying to high-value crops and even putting solar panels on farmers’ fields as a third crop will be needed.

News Source: The Indian Express

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