Doubling Farmers' Income

in India:
Way Forward
-----
Development Economics
Assignment

Hurditya Dand
23HS10024

[email protected]
 Doubling Farmer’s Income: India’s Way Forward

Abstract
The Agricultural Sector roughly estimates to 40% of the Working Population, contributing only around
20% to the GDP. This is a clear indicator of Farmers’ Income being significantly lower than someone
working in the Manufacturing or the Services Sector. This paper will explore the challenges associated
with Doubling Farmers’ Income, and also some Strategies that can be implemented in order to achieve
this Goal. This paper will also take a look on the Government’s initiative, which it had undertaken, to do
the same thing, that is- “Doubling Farmers’ Income”.

Introduction
Doubling of Farmers’ Income is a topic that is incomplete without a set timeframe. In the long run,
Farmers’ Income will definitely at least double, but if we really want to look into the implications of
Several Policies, the we need to fix a set time in which we want Farmers’ Income to Double. In this
paper, we will take the set timeline to be 8 years. So, in order to Double Income, the farmers’ Income
must grow by 9% every year on average. The Original Goal set by Government of India to double
Farmers’ Income was 2015-16 to 2022-23, also 8 years.

Now that we have a set goal to increase Farmers’ Income, the net question in line would be- How? And
another question would be- What is preventing Farmers’ Income from growing significantly? In this
section, we will discuss the significance of the problem- all the factors that are affecting Farmers’ not
being able to increase their income.

As we can see, more than 40% of people depend upon Agriculture for their livelihood. On an average, a
farmer earns an average of Rs. 12,000 per month, whereas it is around Rs. 18,000 for a Factory Worker.
The income of a person in the Service Sector is around Rs. 25,000 per month. This clearly shows a pay
gap between different Sectors in the Country. This is a significant problem, especially because
agriculture remains the primary source of livelihood for the majority of people, yet it is the one that pays

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 Doubling Farmer’s Income: India’s Way Forward

the least. According to a report by NITI AAYOG, 22.5 percent of farmers are below poverty line, with
Jharkhand leading with 45.5 percent.

The question of How to double farmers income will be discussed in this paper. On the other hand, the
question of Why farmers income isn’t increasing is something to ponder upon. It is a collection of
multiple reasons. There has been a historical focus by farmers on output rather than income, and so
Farmers have just focused on improving food security in the country, with many farmers still cultivating
only for subsistence. This led to increase of their income in Real terms, but not nominal.

Although the scenario is much better than what it was 2 decades ago, there is still a long way to go in
order to achieve no pay disparity.

In conclusion, the challenge of doubling Farmers’ Income in 8 years is challenging and complex. This
paper will focus on the approach required to achieve this goal, addressing past issues, and exploring
new ideas. The following sections will delve deeper into the challenges, and try to find solutions for this
problem that has been persistent in the Indian scenario, which will ultimately lead to a more prosperous
Agricultural Sector for India.

Review of Other Reports

The Government of India had aimed for the same goal- “Doubling Farmers’ Income in India”. This target
was set up in the year 2015-16 for the year 2022-23. The goal- Double Income in real terms. For this, the
Government proposed several strategies[2]. The strategies included:

a. Improvement in Productivity
b. Resource Use Efficiency

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 Doubling Farmer’s Income: India’s Way Forward

c. Increase in crop Intensity

d. Diversification towards High Value Crops
e. Shifting Cultivators from Farm to Non-Farm Occupations
f. Improvement in Trade

All what Government of India intended to do, and achieve, was compiled in a report by NITI AAYOG [1].
This report mentioned quite a few points, like the past trends of Farmers Income.

This table, in the report talks about increase in farmers income, as a means of growth rate. As we can
see, Growth rate in Real terms has always been below 5 percent, except from 2004-05 to 2011-12. This,
compared with the growth rate of ither Sectors, is very less. Farmers Income doubled over 22 years:
1993-94 to 2015-16. This was a result of Gradual Increase of Income and is not an effect of any Policy
Effects.

The challenges faced by Farmers included Climate Change Impacts, Small and Fragmented Land
Ownings, Limited access to Credit and Markets, among others. These challenges combined are a
hinderance to increasing farmers’ income significantly.

This paper mentions the required Sources of Growth, in which action needs to be undertaken in order to
have Double Income in 7 years. The Sources of growth are:

a. Development Initiatives
b. Technology Generation
c. Policies and Reforms

Apart from this, traditionally, productivity of livestock is also very low in the country. The increase in
Farmers’ Income needs to come from both, Cultivational and Non-Cultivational means on a farmland.
Non Cultivational means of Income on a Farmland include Livestock breeding, Renewable Energy
Production, Honey Production, and many others. So, in order to double Farmers Income, there must be
an increase in Income via both means and not just by Farming.

Other Research papers, like the one by Patanjali Organic Research Institute (2022) [4] conclude that “In
India, farmers form a major proportion of both producers as well as consumers. Thus, improving crop

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 Doubling Farmer’s Income: India’s Way Forward

production and productivity, along with efficient and profitable farming, as a part of a pioneering growth
strategy, can contribute significantly towards reducing hunger and poverty.” They say that Agricultural
productivity can be increased with Science and Technology Interventions, and Government Policies.

Methodology
Now, we try and answer the main question of this discussion- How to Double Farmers’ Income in 8
Years. For this, a master strategy is required which faces this problem head on in multiple faces. Some
key strategies which can make up this master strategy can be:

a. To enhance crop productivity through adoption of high-yield varieties of seeds. Crop

productivity can also be increased by increased use of fertilizers, and use of efficient irrigation.
Efficient irrigation management systems like drip irrigation, and sprinkler irrigation can be ed in
order to minimize water loss and maximize efficiency of the farm.
b. Livestock productivity can be boosted by improving herd quality, by ensuring proper diets for
herd animals. This can be monitored to ensure no animal is overfed or underfed. Livestock
productivity can also be increased by increasing Artificial Insemination rates. This allows for
genetic selection and improving overall herd quality.
c. Profit Increasing is both Revenue Increasing and Cost minimizing. Costs can be minimized by
promoting sustainable technologies and practices. Fuel efficient machinery must be bought in
order to reduce operational costs. Also, costs can decrease by buying of seeds in off-season and
that alternate generic seeds must be chosen when possible.
d. Double Cropping can be promoted. Farmers can be trained on the usage of double cropping and
should be given access to seeds and technology required for double cropping. Farmers can be
taught on what crops fit the given climate, and can be double cropped. The second crop can
directly be planted into the residue of the first crop in order for the soil to retain its fertility.
e. Shift towards high value agriculture. High value crops like fruits, vegetables, fibers, and spice can
be grown to increase the value of the output. These crops have a higher market value, and can
help increase farmers’ income.
f. Integrating activities like forestry and dairy farming can help add to the income farmers’ gain
additional income as an add on to their cultivation income. Another allied way to increase
income is by producing Sugar off Sugarcane farms. Usually, farmers in India just turn the
Sugarcane into Jaggery, but if there is a Sugar Industry nearby, it increases the value of the
output.

We have different strategies for Increasing Farmers’ Income, but there must be some means to ensure
that it reaches all the farmers households in order for them to reap the benefits of These strategies. For
this, we need to go through Policy Implications of these Strategies, which will lead to their effective
application.

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 Doubling Farmer’s Income: India’s Way Forward

Policy Implications
First, we will go through the current policies, and review them all one by one to see if any Policy needs
any change in order to achieve our goal. Then we will try to form some policies in order to Move Closer
towards our Goal.

Some Policies by the Government include [5]:

a. National Food Security Mission

b. Soil Health Card
c. Param pragat Krishi Vikas Yojna
d. Pradhan Mantri Fasal Bima Yojna
e. Pradhan Mantri Kisan Samman Nidhi
f. Modified Interest Subvention Scheme
g. Agriculture Infrastructure Fund
h. National Bee keeping and Honey Mission
i. Rainfed Area Development
j. Per Drop More Crop

Government has many schemes for the development of farmers, let us discuss each one in detail.

National Food Security Mission: The Mission aims at increasing production of rice, wheat, pulses, coarse
cereals (Maize and Barley) and Nutri-Cereals through area expansion and productivity
enhancement in a sustainable manner in the identified districts of 28 States and 2 UTs (i.e., J&K
and Ladakh). Other objectives include restoring Soil fertility and productivity at the individual
farm level, enhancing farm level economy to restore confidence amongst the farmers and post-
harvest value addition at farm gate.
Here, we can see that with application of NFSM,
and with more area covered under the scheme of
NFSM, the overall production (Area*Productivity)
increases. The Mission met with an
overwhelming success and achieved the targeted
additional production of rice, wheat and pulses.
This mission was initially for the Year 2011-12,
but then because it as such a success, it kept
continuing.

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Soil Health Card: Soil health card provides information to farmers on nutrient status of their soil along
with recommendation on appropriate dosage of nutrients to be applied for improving soil health
and its fertility. The indicators are typically based on farmers' practical experience and
knowledge of local natural resources. The card lists soil health indicators that can be assessed
without the aid of technical or laboratory equipment.
The Soil Health Card has been a boon to farmers as it helps the farmers get an overview of
Nutrients required to grow any particular type of crop on their type of Soil. It also shows the
diseases that can occur in crops in that type of soil so as to prevent diseases from happening.

Param pragat Krishi Vikas Yojana: This scheme aims to increase soil fertility and thereby helps in
production of healthy food through organic practices without the use of agro-chemicals. The
scheme is implemented in a cluster mode with unit cluster size of 20 hectares. A group shall
comprise minimum 20 farmers (may be more if individual holdings are less). Farmers in a group
can avail benefit of maximum of 2 ha as per provision of PKVY. 25 such clusters are converted
into one large cluster of about 500 ha area to facilitate marketing of organic produce. The
scheme provides for an assistance of Rs. 31,500 per ha to states, out of which i.e., Rs. 15,000 is
given as incentives to a farmer directly through Direct Benefit Transfer.
This scheme helps farmers with similar kind of crops in a given area.

Pradhan Mantri Fasal Bima Yojna: PMFBY was launched in 2016 in order to provide a simple and
affordable crop insurance product to ensure comprehensive risk cover for crops to farmers
against all non-preventable natural risks from pre-sowing to post-harvest and to provide
adequate claim amount. The scheme is demand driven and available for all farmers A total of
5549.40 lakh farmer applications were insured under the scheme since 2016-17 and Rs
150589.10 crore has been paid
as claim.

But the number of farmers that

have availed this scheme has
gradually decreased over time.
Flaws within the scheme are the
main reason for the low payout,
say experts. “Enrolment to the
scheme is done through banks
and that may have gone up. But
the claims are either rejected or
they take so long to be
processed that many farmers
lose hope in the scheme,” said Devinder Sharma, a food and trade policy analyst.
This is something which must change. In order to give Farmers’ relief, a faster and more robust
method must be used so that farmers can benefit maximum from this scheme.

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Pradhan Mantri Kisan Samman Nidhi: PM-KISAN is a central sector scheme launched on 24th February
2019 to supplement financial needs of land holding farmers, subject to exclusions. Under the
scheme, financial benefit of Rs. 6000/- per year is transferred in three equal four-monthly
installments into the bank accounts of farmers’ families across the country, through Direct
Benefit Transfer (DBT) mode.
This is a good scheme from the perspective of farmers, but it indirectly increases the
dependency of farmers on Government’s Money. The money used here should instead be used
in other schemes like PPKVY or National Food Security Mission.

Modified Interest Subvention Scheme: The Interest Subvention Scheme (ISS) provides concessional
short term agri-loans to the farmers practicing crop husbandry and other allied activities like
animal husbandry, dairying and fisheries. ISS is available to farmers availing short term crop
loans up to Rs.3.00 lakh at an interest rate of 7% per annum for one year. Additional 3%
subvention is also given to the farmers for prompt and timely repayment of loans thus reducing
the effective rate of interest to 4% per annum.

This is a very good scheme since it promotes alternate sources of income. This scheme can also
be extended to more types of Non-Cultivational Farm Sources of Income.

Agriculture Infrastructure Fund: In order to address the existing infrastructure gaps and mobilize
investment in agriculture infrastructure, Agri Infra Fund was launched under Aatma nirbhar
Bharat Package. AIF was introduced with a vision to transform the agriculture infrastructure
landscape of the country. The Agriculture Infrastructure Fund is a medium - long term debt
financing facility for investment in viable projects for post- harvest management infrastructure
and community farming assets through interest subvention and credit guarantee support. This is
another means to finance Agricultural Loans.

National Bee keeping and Honey Mission: Keeping in view the importance of beekeeping, a new Central
Sector Scheme entitled National Beekeeping & Honey Mission (NBHM) was launched in 2020
under Atma Nirbhar Bharat Abhiyan for its implementation in the field for overall promotion
and development of scientific beekeeping & to achieve the goal of “Sweet Revolution”.
This is another good scheme revolving around additional sources of income, which would lead
to overall growth of income of a farmer.

Any scheme involving subsidized loans is a good scheme according to me because it leads to the
Producer to grow, at the same time, isn’t making them dependent on Government for freebies. On the
other hand, schemes that give out money as a fixed income, is kind of a threat in the long run as it
makes a person dependent on the Authorities for a stable income, and will affect the Budgetary
allocation in the long run.

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Doubling Farmers’ Income, a Conclusion

In order to Double Farmers’ Income, we must have a timeline in mind. If we want to double Farmers’
income, aggressive goals must be kept, and they should be pursued with systematic implementation.

In the short run, i.e., in 1-2 years, the actions that must be undertaken are (a) Pradhan Mantri Fasal
Bima Yojna must process all grievances, and release necessary funds to reduce stress on farmers. (b) Soil
Health Card must be covered throughout the country, so that everyone will be able to access its
benefits, and with it, grow better crops. (c) Begin Farmer Education and training programs and (d) Start
Modernizing infrastructure for Agriculture.
This short run plans will set up the foundation for further projects, and will keep India in the right path
to achieve this goal.

In the years 3-5, some activities that must take place to take forward the growth of income will be (a) To
establish robust market linkages. This would ensure everything that is produced, has a market to
depend on, and everything that does not have a dependable market, is not produced. (b) To scale up
organic farming under Param Pragat Krishi Vikas Yojna. (c) Continue the growth in infrastructure that
had begun earlier. The growth in infrastructure must include major irrigation projects, and creation of
artificial sources of water. (d) Technology for farming must be made available at affordable prices, or at
a low interest loan to all producers. This will help in the long run growth of the economy, and increase in
income of the farmers.
The middle run goals will help farmers boost their incomes, and will incentivize farmers to continue
Agriculture as their source of income, which will help the country grow as a whole.

In the long run, i.e., from 6-8 years after we begin, the changes that must be done will be the finishing
touches to the final goal. Some major things that need to be done in order to achieve this goal are
(a) Increase Investment in Agriculture as a percentage of the GDP from 3% (currently) to at least 5% (in 8
years). (b) To complete the spread of modern technology throughout the country. (c) Achieve full
implementation of all Government Schemes. (d) Attain sustainable farming practices throughout the
country.
These long run goals are set so as to reach our Goal of Doubling Farmers’ Income. If attained, it will give
a boost to all the farmers, and bring their income to par with other sectors, and bring about an
equilibrium in the Market.

If all these Goals are realized, then India will have a very Robust and Secure Agricultural Sector, which
will ensure prosperous growth for farmers across the nation. Through the implementation of key
initiatives like Pradhan Mantri Krishi Sinchai Yojana, Soil Health Card scheme, and Pradhan Mantri Fasal
Bima Yojana, combined with increased public investment from 2.76% to 4% of GDP, farmers will benefit
from improved irrigation, better soil management, comprehensive crop insurance, and enhanced power
supply. This transformation will lead to higher productivity, reduced costs, better risk management, and
ultimately result in doubled farmer incomes, making agriculture a more viable and attractive sector for
future generations.

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References
1. https://eprints.cmfri.org.in/12621/1/Doubling%20Farmers%27%20Income_2017_Ramesh%20C
hand_NITI%20AYOG.pdf
2. Statista
3. https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2003185
4. https://www.researchgate.net/profile/Ashwani-Kumar-
101/publication/362056457_Doubling_Farmers'_Income_in_India_Progress_Gaps_and_Futurist
ic_Approaches/links/62d3628466bd1654d66c31c6/Doubling-Farmers-Income-in-India-Progress-
Gaps-and-Futuristic-Approaches.pdf
5. https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2002012

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