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18
January 2019
 |
Farmer
(The Total Investment & Insurance Solutions)
Farmers could get annual income support of Rs
15,000 per hectare if the Niti Aayog’s proposal for an upfront subsidy through
direct benefit transfer is accepted, said people with knowledge of the matter.
The Aayog has suggested that all subsidies for agriculture, including
fertiliser, electricity, crop insurance, irrigation and interest subvention be
replaced by income transfer. Telangana and Odisha have adopted income support
to help alleviate agrarian distress as opposed to loan waivers that have been
announced by other, mostly Congress-ruled, states. The Centre has said that
such debt forgiveness doesn’t address the root cause. The agriculture sector
gets input subsidies worth over Rs 2 lakh crore every year. Based on the total
cultivable area in the country, it amounts to Rs 15,000 per hectare. Some
experts and policy makers contend that subsidies are not equitable or
efficiently disbursed. In some cases, they have an adverse effect on natural
resources and sustainability of agricultural production, they say.
A senior government official told ETthat the
idea is to move to a mechanism that addresses agrarian distress, prevents the
misuse of subsidised urea and power and gives economic freedom to farmers. It
will also stop massive leakages such as subsidised fertiliser being diverted to
other industries. “The government is of the view that this is the only way
forward to supplement the farm income,” the official said. “Besides, giving
money directly to farmers would give them freedom to choose the best crop and
not go only for subsidised items, be it fertiliser or free power.” The Total Investment & Insurance
Solutions
Minister Narendra Modi had said in 2015 that
the government wants to double farm income by 2022- 23. This needs an annual
growth rate of over 10% but farm output has been lagging, resulting in
declining agricultural income. It is estimated that the income from agriculture
won’t be enough to keep as many as 53% of farm households out of poverty since
they operate on small holdings, some less than a hectare. However, the Centre
will need to convince states to participate in such a programme. Half the
agricultural subsidies are contributed by states in the form of discounted
power and canal irrigation, among others. The fertiliser subsidy comes from the
Centre and that on seeds is shared between the two.
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