Panel on doubling farmers’ income to submit final report next month

Business Fortnight, March 26, 2018

An inter-ministerial panel formed by the Centre on doubling farmers’ income by 2022 will submit its final report next month, its Chairman Ashok Dalwai said.

The Dalwai Committee, set up in April 2016, has already written 14 volumes identifying ways to double farmers’ 2015-16 income level, in real terms, in seven years.

The committee points out that real income of farmers needs to register a compound annual growth rate of 10.4 per cent in order to double by 2022.

“The final report is more or less ready. We will submit it by next month,” Dalwai told PTI.

Already, some of the panel’s recommendations are being implemented by the government. For example, this year’s budget announced upgrading of 22,000 gramin haats to facilitate small and marginal farmers to integrate with organised marketing structure, he said.

This initiative can be expected to answer the current challenges of transacting small lots of marketable surpluses, at low cost and from a position of bargaining strength that comes from farmers collectives being transformed into Farmers Produce Organisations (FPOs), he added.

“While we have to submit a final report, some of the committee’s recommendations are parallelly being implemented by the government,” said Dalwai, who is also the CEO of National Rainfed Area Authority (NRAA).

The government has also come out with a draft agri export policy following the panel’s recommendation to revisit and reorient the trade regime from the national perspective of doubling farmers’ income, he added.

The panel has said agri-trade policy should aim to facilitate and promote ease in doing business, rather than be restrictive and disruptive to business planning.

According to the panel, “A uniform doubling in every region may not be possible, albeit desirable, and due consideration to degradation and depletion of arable land and other resources, the human backdrop and other associated factors is necessary.”

The relatively poorer regions need to ‘catch up’ and hence their pace of change has to be higher, it added.

The committee has observed that an increase in the Minimum Support Price (MSP) could be one of the instruments for enhancing farmers’ income. However, increasing the MSP may not always have a positive outcome from the macroeconomic point of view.

“A more straightforward, and potentially more beneficial, means of raising farm incomes could be reforming the marketing system of agricultural produce, while also developing new institutions and reviving existing ones to facilitate linking of the farmer to the markets,” it added.

The panel said the average income of an agricultural household during July 2012 to June 2013 was as low as Rs 6,426, as against its average monthly consumption expenditure of Rs 6,223. As many as 22.50 per cent of the farmers live below the official poverty line.

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