From relief to resilience: State rethinks farm policies

Have state and central governments done more harm than good by failing to promote self-reliance among farmers?

MUMBAI: The state has spent enormous sums – ₹43,000 crore in the last five years – on compensating farmers for crop losses due to natural calamities, and equally large sums on two loan waivers in recent years. This raises a pressing question: have state and central governments done more harm than good by failing to promote self-reliance among farmers?

Sangli, India – February 9: Farmer Mahavir Tamgave (2L) and family members working in a sorghum field in village Kavthepiran near Sangli in Maharashtra, India on Tuesday, February 9, 2021. (Photo by Uday Deolekar / Hindustan Times) (UDAY DEOLEKAR)

When this was brought to the attention of chief minister Devendra Fadnavis recently, he asked the state agriculture department to suggest amendments in its policies to focus on capital expenditure, to build agri-infrastructure. The goal, he said, should be making farming sustainable and climate-resilient, thus ensuring enhanced income to farmers. Populist schemes such as the ₹1 crop-insurance scheme, and election-related announcements such as loan waivers are not beneficial in the long run, say officials from the agriculture department.

A new focus

The presentation, on March 20, revealed that ₹43,000 crore was spent on compensating farmers for crop losses owing to natural calamities in the last five years, including over ₹10,000 crore paid by the state towards premium for crop insurance.

Astonishingly, none of the money was spent on building infrastructure to minimise the risk of losses due to natural calamities. Rather, the state assumed an additional annual burden of ₹6,000 crore by introducing the ₹1 crop insurance scheme – a plan that benefitted insurance companies more than it did farmers.

“Most of the money was given as assistance to farmers in distress. Alternatively, it should have been spent on infrastructure that would make farmers self-reliant,” said an official who attended the presentation. “After the presentation, the CM and both deputy CMs, approved a policy that would focus on mechanisation, providing farmers subsidies for poly houses (greenhouses), drip irrigation, and schemes like sowing beds so that losses owing to natural calamities are minimised. More land will also be brought under irrigation, especially in rain-fed areas,” the official said.

Farm activist Vijay Jawandhia said the failure of policies by both the central and state governments has led to a rise in farmer distress. “There is no rationale in export-import policies for farm produce. Lack of a minimum support price, inadequate infrastructure, and spending on the employment guarantee scheme have made farmers vulnerable. The Maharashtra government’s new focus on capital expenditure is a way to avoid offering financial assistance to farmers in distress,” he said.

Sustainable farming

Fadnavis first spoke of sustainable farming in his earlier stint as chief minister in 2014. However, no steps were taken to implement his vision then.

“While Fadnavis talked about spending more on infrastructure, there was a near-revolt by farmers, who relied on loan waivers due to successive droughts between 2012 and 2016. The Shiv Sena, too, insisted on the waiver, compelling Fadnavis to announce the scheme in 2017. This led to a burden of ₹18,762 crore on the state exchequer as the waiver was extended to 4.4 million farmers. It compelled the government to put the infrastructure-generation plan on the back burner,” said an official from the agriculture department.

Next, the Maha Vikas Aghadi government announced another loan waiver, in December 2019, disbursing over ₹20, 487 crore to over 3.21 million farmers. “This badly impacted spending on agriculture infrastructure for the next few years. In fact, the Mahayuti government under Eknath Shinde increased compensation multifold, further burdening the exchequer. Per-hectare compensation for crop losses increased and parameters were changed. This diverted government funds from investing in infrastructure,” said another official from the agriculture department. “ ₹4,800 crore was spent on infrastructure generation under the Nanaji Deshmukh Krishi Sanjivani Prakalp (NDKSP) but it didn’t really help the farmers.”

Significantly, NDKSP was launched for the adoption of climate-smart technology and practices, contributing to drought-proofing. “But large-scale corruption at the administrative level sabotaged the scheme,” admitted the officer.

Distress: An unending story

Maharashtra records 2,600-2,800 farmer suicides annually, a daily rate of 7 to 8 deaths by suicide. Two loan waivers – in 2017 and 2019 – by two consecutive governments have not cut these numbers in over a decade. Spending on loan waivers deprives the farm sector of infrastructure development, leaving farmers at the mercy of natural calamities.

Failed crops due to natural calamities, lack of minimum support price for produce make it difficult to recover input costs. Manoj Shembde, a farmer from Khalegaon, Georai in Beed, cultivates cotton, soybean and onion on nine acres, but ends up gaining little or nothing. “I grew soybean on two acres and cultivated 1.75 tonnes to get ₹68,000 by spending ₹42,000. Other kharif crops yielded nothing. As for input costs, the cost of labour, transportation, fertilisers and pesticides has increased so much over time, while the market price of produce has not risen proportionately,” he said.

Ajit Nawale of the All-India Kisan Sabha, said, “Before talking about sustainable farming, the state should stop linking farm policies with political and election gains. Also, corruption in schemes like crop insurance only adds to farmers’ distress. The state cannot shrug off its responsibility of standing by farmers in case of natural calamities,” he said.