Why does a farmer in India need social security?

Note: the inputs of this article are taken from the Yojana magazine 

The situation of an ordinary farmer

  • From the days of food shortage in the 1960s India found a place among the world’s top two producers of rice and milk and attained self-sufficiency in food.
  • The focus of policy then broadened to cover other crops of consumer interest like pulses, fruits and vegetables.
  • Yet, in this growth story, large sections of primary producing farmers remained deprived,
  • Not only do farm incomes tend to be low, some of the worst victims of economic uncertainty are farmers.
  • A survey of 2003-04 conveyed that 40 per cent of agricultural households would take up a different occupation if given a choice (NSSO, 2005).
  • Later, the same survey showed that even to meet their meagre consumption needs, agricultural households needed to supplement their income from cultivation with other sources (NSSO, 2014).

Vulnerability of farmers

  • Farmer’s income gained interest in the wake of reports of farmers’ distress and the Prime Minister’s speech about doubling food producers income by 2022.
  • Farm income depends on several factors. Productivity, especially of land, is regarded as the key to higher earnings.
  • Raising the total factor productivity is also important because other scarce inputs like water and fertilizer are costly.
  • Improvements in technology and practices enhance production and efficiency.
  • Marketable surplus and product wastage also determine sales value, but prices of products and inputs are critical determinants of farm income.
  • In a federal setup, policy also differs among states. Consequently, crop yield rates, infrastructure and institutions vary across the country.
  • Small sizes of Indian farms create diseconomies.
  • Population growth, together with poor industrial employment generation, creates pressure on land, keeping per capita farm incomes low.
  • Crop cultivation is, therefore, more remunerative in some parts of the country than others owing to natural, demographic and administrative differences.
  • Workforce mobility across sectors is a way to enhance per capita household incomes and to bring fresh ideas and skills to the sector.
  • Higher farm incomes, in turn, generated demand and helped the non-agriculture sectors.
  • Weather. Monsoon failures can impair not only current production, but their effects can spill over to subsequent seasons and years.
  • Consecutive failures of monsoon such as in 2014 and 2015 can leave farmers in debt and distress by wiping out investments made.
  • Excess or untimely rainfall is a threat too. Floods can be devastating. In 2016, when monsoon was normal, as many as 9 states faced floods.  
  • Price movements too cause vulnerability.
  • Even under normal circumstances, pressure mounts on prices in the few months of marketing.
  • Although the same prices tend to recover and even rise subsequently but farmers have little means to hold back stocks.
  • They even buy food later at higher prices.
  • Raising MSP encourages farmers to grow enough food for the country and keep prices remunerative and stable but only if government can procure adequately.
  • Supply gluts depress prices. The bumper harvest of 2016-17 brought prices of pulses down in spite of raised MSP.
  • Demand fluctuations and global competition may further intensify price uncertainties with the opening up of markets.

Rural amenities

  • Viewing welfare in the light of only production and prices is misleading. A whole range of services facilitate every-day life, open up new opportunities and bring capabilities.
  • Many of these dispensations, can be perceived as ‘rights’ of citizens and obligate the State. Unfortunately, an ‘urban bias’, apparently still lingering in India’s development, victimizes farmers more than others.
  • For many years, human resource development of the poor was not in focus. Even after school enrolment began to receive importance, education fell short in quality and employable skill content.
  • Budget constraints, weak policy implementation and corruption are some of the historical factors responsible.
  • They also undermined public health services on which also large sections of farmers in the country depend.
  • Nutrition and environment, which could be improved by sustainable practices, also determine health.
  • PDS has served the small farmers when food production fell short of subsistence needs but, facing a barge of criticisms, the PDS is going through continual amendments since mid-1980s.
  • Although public efforts focused on physical communication (roads, railways, metro-rails) in the last decades, still 16 per cent of Indian villages lack connectivity by all-weather roads (2017).
  • Census data analysis shows that 45-70 per cent of rural houses lack facilities of electricity connection, water supply in premises or access to latrine and 18 per cent of them lack all of these facilities.
  • Quick information transmission is enabled by mobile phones, internet and space technology requiring certain basic infrastructure.

Thus, physical infrastructure can improve social life of the farm community, raise productivity, facilitate marketing, reduce product wastage, promote value-addition and make social infrastructure more effective.

Women have special needs.

  • Women of peasant households engage mostly as unpaid farm workers.
  • Those from small-holding farms take up uncomfortable functions such as rice transplantation at low wages.
  • Evidences suggest women withdraw from labour-force with the advent of new technology and higher income opportunities.
  • Given the obvious preference of men to move away for non-farm work, much of the ‘feminisation’ of agriculture may be a compulsion for poorer women.
  • Training and skill, women-specific health facilities, childcare support, machinery adapted to female anatomy, access to information are important for welfare of farm women.


Farmers’ Welfare: emerging ways

For many years, the key instruments of India’s agricultural development addressed production that served to ensure food security of consumers by making farming remunerative.

When it appeared that much of the support was cornered in surplus producing regions, attention was diverted to other crops, storage facilities, rainfed regions and local needs specifically in the east through programmes like Bringing Green Revolution to Eastern India (BGREI), Integrated Scheme of Oilseeds, Pulses, Oilpalm and Maize (ISOPM), National Food Security Mission (NFSM) Rashtriya Krishi Vikas Yojana (RKVY), Warehousing Development and Regulatory Authority (WDRA).

  • Sustainable practices gained priority. Having signed the Paris accord, India participates in the international battle against climate change and has a comprehensive guideline (NAPCC) towards high growth with sustainable development.
  • Insurance. National Agriculture Insurance Scheme (NAIS), begun only in 1999-2000, followed an ‘Area’ approach to yield insurance because farmers in any ‘Area’ can be expected to face similar risk incidence. The NAIS failed to address perils affecting smaller units of area due to dearth of data and it was commercially loss making.
  • In January 2016, the government started an umbrella Pradhan Mantri Fasal Bima Yojana (PMFBY) which covered risks of weather, pests, diseases, prevented sowing and damages on standing and harvested crops.
  • Empanelment of private insurers for quoting competitive actuarial rates invited private sector participation.
  • Modern technology accelerated the pace and intensity of collection of yield data so that the notified ‘Area’ can become truly homogeneous in future.
  • The nation’s satellite and meteorological capabilities are strengthened to generate early and reliable alerts.
  • A disaster response force was instituted with passage of a Disaster Management Act in 2005 whereby Central forces are deployed to support the states as and when needed.
  • Drought is treated as a disaster calling for special subsidies on irrigation when state notifies drought.
  • Marketing needed reforms when traditional regulations became self-defeating.
  • To make markets competitive and efficient, the Agriculture Produce Marketing Committee (APMC) Act was amended to allow farmers more option.
  • Storage and distribution systems, now facing supervisory and budgetary challenges, determine the effectiveness of government intervention to control price.
  • Input and food subsidies and enactment of the NFSA in 2013 which made food entitlement legal, impose further fiscal pressure.
  • Yet, increasingly prices are influenced by forces in the global market when government intervention runs the risk of misleading farmers and even hurt their interest by creating shortage or glut.
  • Meanwhile, India’s subsidy system is also in historic transition. The landmark UID and banking outreach programme (Jan Dhan) enables Direct Benefit Transfer (DBT) to poorer beneficiaries.
  • The Economic Survey 2016- 17 devotes a whole chapter on a new concept of Universal Basic Income that can potentially substitute all subsidies.
  • Many rural development schemes now help to improve the living standards of farmers through subsidies or investments addressing livelihood (NRLM), price discovery (eNAM), Social assistance (NSAP), housing (IAY), Road development (PMGSY) and health (NRHM).
  • Irrigation gained a special place because affordable irrigation can mitigate drought effects.
  • MGNREGA has been a major milestone in assuring a minimum income to rural population. It symbolizes a legal right to employment. Though controversial for its budgetary implications and historically low-quality output, conducted purposively, it can be a means to quality rural asset generation.
  • To promote employability, productivity and enterprise standardized skills are promoted through the National Policy on Skill Development and Entrepreneurship (NPSDE) in 2015.

Way forward

  • For years, farmer’s income security was driven by mechanisms that were primarily meant for consumer welfare. A new transformed paradigm of social security system now looms in the horizon, where the minimum welfare of each citizen is viewed as a right.
  • The State is the natural custodian of farmer’s social security as much as people’s food security.
  • Protecting them against natural risk, creating infrastructure and social amenities and facilitating knowledge and information flows remain government’s onus but the tax-paying citizens who benefit from food security and the private sector which gains from a prosperous farm sector require to join as stakeholders.
  • In the long way ahead, agriculture is envisioned to grow as an enterprise, more integrated with other growing sectors, that help to ease the pressure on land for livelihood.
  • Supervisory complexities of the State are alleviated over time by technology aided administrative innovations. The farmer, as a citizen with the right to a decent life, strives to be also efficient in market.


note: inputs taken from the Yojana magazine

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