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Indian farmers can be given relief by promoting allied activities
In the second quarter of the financial year 2019, agricultural and allied activities increased at a rate of 3.8%, whereas in the same period of last year there was an increase of 2.6%.

Analyzing data reveals that the main contribution in the growth rate of 3.8% is related to allied activities such as animal husbandry, forestry and fisheries. These areas have increased at a rate of 6.7%. The crop product, which includes vegetables and fruits, has increased by 0.5%.

At present, the agriculture sector is facing diverse problems. Worry is also related to the low price of farm produce. For example, the price of agricultural produce was only (-1.0%) in the second quarter of the financial year 2019. The trend of decline in agricultural deflator also confirms the poor condition of the agriculture sector. Most agricultural products in the market are available at less than the minimum support price (MSP). Such a negative situation is persisting in the country, when the government has tried to help farmers through various measures like soil health card, crop insurance scheme, various irrigation programs, Increase the MSP of various produce 1.5 times etc. in the last 4 years.

Low growth in agriculture advances shows that there is a situation of sluggishness in agricultural activities. Data related to agriculture advance & NPA from some banks show that in the quarters of March, 2018 to September, 2018, the percentage of NPAs has increased in the aggregate agricultural advance. Here, some states have adopted a policy of agricultural debt waiver for gaining benefits in incoming elections. Such scenario in some states has worsened the situation of NPA. Due to frequently announcement of debt waiver by some states, honest farmers have started to avoid repaying agricultural loans.  

Slow growth in credit distribution in agriculture sector and mounting NPA in agriculture credit is certainly a matter of concern. The growth of non-food credit has improved considerably in the current financial year, but the increase in food credit is still remains low. In the current financial year, there has been an increase of about Rs.3.2 lakh crore in non-food credit, while in the case of food credit this growth is just Rs 29,500 crore during April to October, 2018. In the month of October, the incremental credit distribution has significantly decreased in comparison to September. Thus, in October, the gross bank credit is only 15% of incremental credit growth. It seems that the work is not being done in accordance with the holistic approach to the development of agriculture sector. There is need to adopt more helpful measures to improve the income of farmers. 

Measures to reduce problems

NABARD has recently published the report of NAFIS survey, according to which the situation in the agriculture sector is pathetic and the wages given to agricultural laborer is also low, while in the case of livestock, the growth rate in the second quarter of the financial year 2019 was good. Further, it is estimated to increase allied sector growth by 8% in the current financial year.

In terms of population of animals, India is the largest country in the world. About 57% of the total population of buffalo in the world is found in India. Animal population in India is 15% of the total population of animals in the world. If animal husbandry is practiced professionally in India then the income of farmers can increase. The farmers are facing various risks due to drought and flood every year. It happens owing to monsoon uncertainties. Actually, such risks are presently on higher side due to dependency on agriculture.   

To increase the income from livestock, it is necessary to promote the indigenous breeds of cows and buffaloes, because in their milk A-2 is found. The A-2 is beta-casin protein, which makes the milk healthy and nutritious. The A-2 allele genes are found in indigenous cows and buffaloes of India. Demand for A-2 milk worldwide is rapidly increasing day by day. The A-2 gene in milk produces opportunities for the farmers of India to earn more money.  

India should do research in this area and export more and more A-2 gene based milk. To promote the demand of A2 milk in India, it should be included in the Mid-Day Meal menu. This gives additional income of Rs.7000 per year to 15.83 million farmers. With such initiatives, small and marginal farmers may also be encouraged to earn money.  In view of these advantages, Indian indigenous cows are being brought to Brazil. The indigenous breeds of cow are giving more than 70 liters of milk per day in Brazil. Today, Brazil is the largest exporter of indigenous cows of India.

Extend help to farmers through Farmer Generation Organization (FPO)

The government has set up a FPO for the farmers' help. It is helping farmers with available resources. The FPO works as a hybrid between cooperative and private companies. It functions as a sub-agent for government agencies in the purchase of agricultural commodities under various government schemes. Such companies buy products in bulk and make them available to the members. It also works to buy products from the members in an organized manner. At the same time, it is also working to provide loans to the members by making synergy with the bank's officials.

Scheme to promote agricultural income

In order to maximize the benefits to the farmers, Maharashtra has initiated the agri-business and rural transformation project at a cost of Rs.2115 crore, aimed at developing new farmers and new markets. The Telangana government is running a scheme called "Raithu Bandhu" to increase the income of farmers. Under this, 58.33 lakh farmers are being provided Rs4000/-in every season for production of crops. The Government has allocated Rs.12,000 crore in the financial year 2018-19 for this scheme. This is the first plan of its kind, in which the cash is being paid directly to the farmers. If this scheme is implemented all over India then the total financial burden of Rs. 2.7 lakh crore is estimated to fall on the government. This estimate is based on the basis of sowing land in all states. This scheme may be more beneficial If it is expanded in states like Bihar, Assam, Chhattisgarh, Haryana, Punjab, Jharkhand and Uttarakhand, because a large chunk of farmer's population reside in these states.

It can be said that today the agriculture sector is facing the problem of low yield of agricultural produce and ineffective marketing of various agricultural products. Therefore, the government should pay attention to the increase A-2 milk production, promote the breeding of more and more indigenous breed of cows and buffaloes, expanding the area of FPO etc., so that the social and economic condition of the farmers may improve.

About the author: Satish Singh is currently working as Chief Manager of State Bank of India's Economic Research Department, Corporate Centre, Mumbai, and has been writing mainly on financial and banking topics for the last 10 years.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of In case you have a opposing view, please click here to share the same in the comments section.
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