Budget 2020: Doubling farmers’ income by 2022 a tough task, but not an impossible one

Modi govt has promised to double farmers' income by 2022.
An idea of generating solar power in the farms has the potential to achieve a quantum jump in farmers’ income and can be a game changer.

By Ashok Vishandass

‘Agriculture, irrigation and rural development’ is one of the three constituents of Aspirational India theme of the Union Budget 2020. The government’s resolve to double farmers’ incomes by 2022 has been emphatically underscored and 16 measures to boot up agriculture have been outlined. These measures range from encouraging states to carry out agriculture marketing reforms, the Model Contract Farming Act, 2018 to making Indian farmers producers of solar power, to build efficient value chains for perishable commodities and significantly increasing processing capacity for milk, to name a few. While these are steps in the right direction, are these enough to double farmers’ incomes by 2022?

For doubling farmers’ income by the stipulated year, an annual growth rate of about 15% in farmers’ real incomes in the next three years is to be achieved, compared to 2.4% clocked in 2018-19. Well, growth in the sector can accelerate and reach closer to the target of doubling farmers’ income if solutions covering storage, financing, processing and marketing are integrated along with planting solar trees in fields in a mission mode. At the same time, reforms in food subsidy need to be carried out, an important measure that escaped the attention of the finance minister while making Budget 2020.

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The idea of generating solar power in farms has the potential to achieve a quantum jump in farmers’ income and can be a game changer. Solar-powered pump sets would give way to agriculture diesel pumps. Solar trees can be planted in farm land at a height of approximately 12 feet without blocking necessary sunlight required for photosynthesis process for the crops. Solar power generated could be sold to the main grid. About 1250 to 1400 solar trees can be planted in an area of one hectare without hindering movement of tractors. As this will lead to a significant augmentation in land productivity, farmers’ total income will increase by about Rs 2.5 to 3 lakh per hectare. Of course, this would require initial hand holding by the government in terms of enabling farmers to start up.

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With 16 measures announced in Budget 2020, issues relating to infirmities in food and fertiliser subsidies need to be addressed on a priority. With the implementation of the National Food Security Act from July 2013 (NFSA), the food subsidy bill has increased from Rs 1.13 lakh crore in 2014-15 to Rs 1.71 lakh crore in 2018-19. There are two components of food subsidy: (a) subsidy provided to FCI for procurement and distribution of wheat and rice under NFSA and other welfare schemes and for maintaining the strategic reserve of foodgrain and (b) subsidy provided to states for undertaking decentralised procurement. While the interests of the vulnerable sections of the population need to be protected, the issue of burgeoning food subsidy bill requires to be addressed. FCI holds stocks of over 75 million tonne which are way above buffer requirement by about 54 million tonne. The market value of excess stocks is about Rs 1 lakh crore, though its economic cost is estimated at Rs 1.62 lakh crore. Excess locked stocks are helping none except a few corrupt stakeholders and calls for its immediate liquidation. The revenue of Rs 1 lakh crore thus realised could be utilised for farmers’ welfare.

(Dr Ashok Vishandass is Professor (Applied Economics) at the Indian Institute of Public Administration and former chairman (CACP) at the ministry of agriculture.)