Not The MSP Route

Context: MSP is not the way to double the farmer’s income. Need of the hour is to include animal husbandry and fisheries in the list.

About doubling the farmer’s income

• In 2016, India set out the target to double farmers’ incomes by 2022-23.
• The Ashok Dalwai Committee was set up to chalk out a strategy to achieve the taraget of doubling farmers’ incomes in real terms over seven years with the base year of 2015-16.
• As per committee, to achieve the target by 2022-23, a growth rate should be 4% per annum.

Challenges in doubling farmers’ income

• Inconsistent and limited growth prospects: The compound annual growth rate (CAGR) turns out to be 8% between 2012-13 to 2018-19.
• But real growth shrinks to 3% (Considering CPI-AL as inflation factor) or 6.1%(WPI).
• Further, agri-growth is highly volatile and depends on monsoon.
• Huge gap between agri-growth among states: Punjab with almost 99% irrigation cover, will have a much more stable income than Maharashtra with just 19% irrigation cover.
• Farm income component remains stagnant or is decreasing: Comparing SAS-2002-03, 2012-13 and 2018-19,
  • The share of income from rearing animals has gone up dramatically from 4.3% in 2002-03 to 15.7%.
  • The share of income from the cultivation of crops has decreased from 45.8% to 37.7%.
  • The share of wages and salaries has gone up from 38.7% to 40.3%.
  • The share of income coming from non-farm business has come down from 11.2% to 6.4%.

Way Forward:

• No MSP route: Success in animal husbandry or fisheries where there is no procurement by government shows that agri-sectors could sustain market model system with minimum state interference.
• Transform agriculture demand driven with diet diversification and nutritional sufficiency at the core.
• Incentivise private sector to build efficient value chains based on a cluster approach.