India

India election: Are farmers on track to double their incomes by 2022?

Indian Prime Minister, Narendra Mod on left, quote: "By 2022, farmers' income will have doubled..."

Claim: Speaking in 2016, India's Prime Minister, Narendra Modi, said farmers' incomes would double by 2022.

Verdict: Official data indicates a significant increase in farmers' incomes in the three years up to 2016. More recent data is not available. The current government has introduced policies to support farmers but experts believe a doubling of farm incomes by 2022 is unlikely.

Presentational grey line

It's been a running theme of Narendra Modi's government - angry farmers on the streets demanding an end to the crisis on India's farms, and a better financial deal.

In the February 2019 interim budget, the government pledged to give 6,000 Indian rupees (£64) a year to help farmers with holdings of less than two hectares, and announced some other support as well.

However, these moves have been criticised by opposition parties as vote buying.

In state elections in December 2018, the ruling BJP fared poorly - something media reports put down to a loss of support in rural areas.

"By the time the country celebrates its 75th independence anniversary in 2022, farmers' income will have doubled," Mr Modi said at a rally in Uttar Pradesh state in 2016.

Despite its shrinking contribution to India's GDP - the total value of all goods and services produced in the country - agriculture still employs more than 40% of the total workforce.

Have incomes been rising?

In 2016, the average monthly income of a farming household was about 9,000 Indian rupees (£100), according to a survey conducted by the National Bank for Agriculture and Rural Development.

This report found, by comparing their data with a national survey of all households, that farmers' income had increased by 40% in the three years up to 2016.

The current BJP government came to power in 2014.

Image copyright Getty Images

However, no official data exists for subsequent years, so we don't know how much farmers earn today.

The government's National Institute for Transforming India says in a 2017 report that for farmers' income to double by 2022, the agricultural sector needs to grow at an annual rate of 10.4%.

Experts believe the sector is not growing at anything like that rate.

Ashok Gulati, an agricultural economist, says: "A 10.4% agricultural growth rate was what was needed two years ago.

"At present, an agricultural growth rate of 13% annually would be needed to double farmer incomes, which does not seem likely to happen before 2030."

What problems do farmers face?

Droughts, bad weather, a lack of modern equipment and proper storage and transport infrastructure have plagued Indian agriculture for decades.

In addition, many of India's farmers work on small or marginal holdings, making achieving efficiencies through economies of scale more difficult.

The current administration has introduced pro-farming policies that include:

  • a crop insurance scheme
  • a soil health card scheme to improve productivity
  • an online trading platform for agricultural produce

But it's also faced criticism for economic policies that have impacted farmers - such as the sudden decision to 2016 withdraw the 500 and 1,000 rupee notes from circulation in a bid to tackle the black economy.

There have been notable gains in agricultural production in some areas.

The central Indian state of Madhya Pradesh is a useful case in point.

In 2106, the prime minister said: "After the BJP came to power there, it has become number one among all states in the field of agriculture for the last three years."

Image copyright Getty Images
Image caption There are issues with storage and processing

The state's annual agricultural growth rate increased from 3.6% to 13.9% between 2005 and 2015, according to official figures.

But most of that was under previous Congress-led governments.

It's also worth noting that the farmers' suicide rate in the state rose between 2013 and 2016, according to official crime reports.

Why aren't farmers earning more?

Thousands of farmers commit suicide every year in India and the reasons are often complex.

But many are linked to debt and other liabilities that producers take on to buy agricultural inputs such as seed, fertilisers and equipment.

Low crop prices compound the difficulties for farmers, who find they can't earn enough to pay off their debts.

A very good harvest in any year will result in a sharp fall in the price of a commodity.

To counter this, the government sets a minimum purchase price for major agricultural products each year, a policy that's been in effect for decades.

Currently, this guarantees a minimum purchase price for farmers on 24 different crops, such as wheat and soybean.

These prices have been increasing over the years for most crops, according to government data.

However, an official report in 2016 raised questions over how effective the minimum purchase price was in some areas due to lack of awareness among farmers, as well as issues over its implementation.

And it doesn't cover all crops, such as onions.

Image caption Sanjay Sathe (left) sent his onion crop earnings to the prime minister

One farmer's unusual protest last year thrust this issue into the limelight.

Dismayed at how little he had made after selling his annual crop of onions, Sanjay Sathe, from Maharashtra state, sent his earnings to Mr Modi in protest.

Some experts believe that instead of raising the minimum price of crops. the government should formulate policies that directly increase the income for farmers.

And with an election approaching, the leader of the main opposition Congress party, Rahul Gandhi, has announced plans for a minimum basic income for poor people in India.

"No-one will go hungry in India. No-one will remain poor," he said.

The BJP, meanwhile, is now said to be considering waiving loans for farmers. But this would be a huge financial undertaking. And there is disagreement about how effective such a move would be.

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