Diversify The Farm Income Fix

Context: An approach that takes into account peculiarities and constraints of states, investment in infrastructure and links farmer producer groups with markets can put agriculture on a high growth trajectory.

      

Need for growth in Indian agriculture

• For the benefit of large workforce: It engages close to 42 % of the country’s workforce.
• Linkage with socio-economic indicators: like poverty, malnutrition and hunger etc…
• For the development of economy as a whole:
  • Triggering a multiplier effect in the economy: As agriculture provides inputs for other industries.
  • Triggering a demand-led growth: If farming community are financially empowered.

A roadmap for enhanced growth in Indian agriculture: Based on recent publication from Springer Nature, “Revitalising Indian Agriculture and Boosting Farmer Incomes”.

• Improve access to infrastructure: mainly irrigation and roads by increasing public investments.
  • In Gujarat, Madhya Pradesh, Odisha and Bihar, bringing markets closer to farmers and increasing the efficiency of the value-chains helped in agricultural growth.
  • In Gujarat and Punjab, timely access to sufficient irrigation and uninterrupted quality power leads to high performances.
• Diversification to high value agricultural products: like fruits, vegetables, and allied activities.
  • Led to high Gross Value Output (GVO):Among the six states, GVO in agriculture grew the fastest in Gujarat at 9.1 % due to diversification to livestock, cotton, oilseeds etc. (Fig.1)
• Provide price incentives and favourable terms of trade.
• Rationalise subsidies (both input and output) via direct income transfer: To empower farmer and give them right signals for efficient use of the resources (fertilisers, power, and water).
• Undertake policy reforms: States that undertook reforms are to be ranked low on NITI Aayog’s Agricultural Markets and Farmer Friendly Reforms Index (AMFFRI); (Fig. 2)
  • Lower the rank witnessed faster agri-Gross Domestic Product (GDP) growth rate. (Blue box)
  • Higher the rank, witnessed relatively lower agri- GDP growth rates. (Red Box)
  • But Karnataka, Haryana and Maharashtra are exceptions.
• Adopt value-chain approach: away from production centric approach; with Farmer Producers Organisations at its centre.

Conclusion: Following the above roadmap will help put agriculture on a higher growth trajectory, augment farmers’ incomes, and promote sustainable development of agriculture.