BS Agri Round Table: Doubling farm income by 2022 possible, says Chand

Says By 2030, we will have a surplus in many commodities such as rice, wheat and coarse cereals

Doubling of farm income by 2022 is a challenging but achievable goal, said Ramesh Chand, member, NITI Aayog, at the Business Standard Agriculture Round Table on Doubling Farmers’ Income by 2022 - The Road Ahead.

“Doubling of farm income is an ambitious and challenging goal. It is possible in majority of states. But much depends on the initiatives of states,” said Chand. He argued that part of the explanation for rise in farm distress was the rise in inputs costs — in particular that of labour.

“If you remove horticulture and livestock and just consider cereals, pulses, etc, then farmer income in 2014-15 was lower than in 2006-07. This is because cost of labour has gone up sharply,” said Chand. “Farmers are getting a fraction of what non-agricultural workers are getting. They are taking loans for non-agricultural consumption. This is worsening the situation.”

Speaking at the event, other experts contended how agriculture's performance over the coming decades would also depend on the ease of doing business. “There are too many laws,” said Vijay Sardana, an agri-business expert. “Some date back decades. Why should we have these laws in 2017?” 

Others concurred. “There is no need to have another law on contract farming. A contract will work if it makes sense for the parties involved,” said Arjun Uppal, vice-president of corporate affairs at DCM Shriram Ltd. “The farmer is a sensible commercial businessman.”

While agreeing in principle, Chand said, “Some regulations are necessary.”

Some experts were worried that in the absence of any increase in productivity, demand for some commodities could outstrip supply. “By 2030, we will have a surplus in many commodities such as rice, wheat and coarse cereals, but we will have a problem in pulses and edible oil,” said P K Joshi, South-Asia Director of International Food Policy Research Institute.

In the case of perishable commodities like fruit and vegetables, too, demand has been increasing at a very past pace. “If we continue with business as usual, we will be faced with a deficit in production of perishables. We need to reduce post-harvest loss in these commodities,” said Joshi.  These items also have tremendous scope for exports. The global trade in these commodities is roughly $210 billion. Another area of growth that experts identified was organic products. As Joshi pointed out, “Global demand is growing at a fast pace. We can take advantage of that.”

But, as the experts pointed out, constraints to growth remained — in particular those of small and fragmented landholdings and lack of investment. Others were, Joshi pointed out, absence of a consistent trade policy, price volatility and underdeveloped cold storage chains. Experts said progress on improving the quality of produce was also a requirement. “We have to benchmark ourselves against our competition. This has to be done across all sectors and across every element of the value chain,” said Sardana.

“An agricultural policy should be designed in a manner that it not only encourages domestic production, but also exports,” said Arpita Mukherjee, professor at ICRIER. “But we have to customise our product offering according to the demands of our customers.”

But some agriculture reforms are particularly contentious. Citing a personal example, Chand said: “We had come out with a document which supported the use of GM technology, subject to some restrictions. It should be developed by an Indian company and in areas where there is a lack of domestic or alternative technology. But you can't imagine the attack (directed at us because of this proposal).”

Giving another example, Chand said, "I had written that the Centre could consider moving agricultural marketing to the concurrent list. But the mere suggestion evoked stiff opposition. In any democracy, such decisions should be left to institutions. We should have faith in institutions."