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.