In 2018 the Government has set a target to double farmers' income by the year 2022. To achieve this, it means that the income of farmers should grow at a Compound Annual Growth Rate (CAGR) of approximately 19% whereas at the current 3% growth rate it would take another 25 years to double their income. Although government is taking a lot of measures for achieving the target like neem coated subsidized urea so that it cannot be sold in black to chemical industry and reaches the farmer directly. It has also launched Pradhan Mantri Kisan Samman Nidhi Yojana in which small and marginal farmers who have less than 2 hectares of landholding will get up to ₹6,000 per year as minimum income support. But it is also important to have a discussion on how to achieve the desired target.
Following five points that the government can focus on to boost farmers' income growth rate:
1) Promote direct sales.
If the government can frame policies and provide a framework through which farmers can directly sell their crops to the buyer instead of selling it to the middleman. It can lead to huge profit for the farmers which was earlier earned by the middleman. This type of model is currently being practised in some townships and societies where farmers are assisted in setting up a Weekly Market. One of its kind is operating Blue Ridge Township, Hinjewadi Pune.
2) Diversify the income sources for the farmers.
The government needs to reduce the dependency of farmers' income from the sales of crops and find an alternative for them. This can be done if the state governments can help farmers in setting up small businesses. For instance the government of Uttarakhand can help their farmers in the sales of local product, which are in very high demands by tourists, throughout India like flavored salts (pisoon namak, lahia namak), Malta juice, Rhododendron (Buransh) Juice etc. This can also be done by using a Public-Private Partnership (PPP) where private companies can be asked to invest and promote such type of businesses and the government can convince them by providing tax subsidies.
3) The government needs to provide water to farmers throughout the year.
Agricultural irrigated land (% of total agricultural land) in India was reported at 36.79 % in 2013, according to the World Bank. This means that About 2/3rd cultivated land in India is dependent on monsoons and with recent incidents of climate change the country faces increasingly extreme weather conditions such as severe droughts and floods. This is hampering farmers' production capacity, and impacting their livelihoods. The government needs to fast track the building of irrigation canals and Dams so that water can be available to the farmers throughout the year which will lead to better crop yields. The government can also give the labor work of dam and canals to the farmers which will further add up to the income of the farmers.
4) Bio-Fuel
According to the oil ministry's Petroleum Planning and Analysis Cell (PPAC), India's oil import was 83.7 per cent in 2018-19 for which it spent USD 111.9 billion. Switching to Bio-Fuel will cut down expenses of petroleum import and this fund can instead be directed to farmers of rice, wheat, pulses, sugarcane and other whose agriculture product or waste can be used to make Bio-Fuel. Instead of burning the straw in Punjab, Haryana, and UP, which leads to pollution, the government can buy it from the farmers and simply convert it to bio-ethanol and use it for running public transport. The government can take steps to promote companies to make Bio-Fuel vehicles and make farmers the Bio-Fuel suppliers. This will put the government on track to achieve the target of 19% CAGR and it will also address the problem of clean fuel and farmer employment.
5) Alternative to farm loan waiver.
The first flaw with farm loan wavier that the government needs to understand is that around one-third of total households take a loan from money lenders and other non-financial institutions. Although around 60 percent of households take loans from financial institutions, the average loan per household from non-institutional sources is Rs 63, 645 whereas average loan from the financial institution is Rs 28, 207which means that when the government announces farm loan wavier a large number of farmers doesn't get the benefit of the scheme. So instead of this, using the fund government can buy shares of initial public offerings on the stock market of the companies which operate on public money. Then the farmers get their share of the dividend.
For India to become a 5 trillion-dollar economy, the agricultural revolution needs to take place, as 50% of the workforce works in agriculture and it only contributes 14% to the GDP. A lot of research is required to make agriculture sustainable, both economically and environmentally, an aspect that could be addressed by scientific research.