Profitability for Farmers

“There is an emphasis on increasing farm productivity, but this might not always align with greater profitability for farmers.” In this regard, do you think government should also focus more on farmer welfare? Comment.

Since 1970-71, trend growth in Indian agriculture has been more than population growth but well below in comparison to GDP growth. This implies that India has achieved substantial levels of food security (now one of biggest exporters) but farming as an economic activity has been less profitable. This divergence between profitability and productivity may happen because of following reasons :
  • Policy environment favours inputs for e.g. farmer can get subsidized urea, seeds, power, crop loans etc. but there is less focus on output. Less awareness about MSP, corruption in procurement, delayed relief in disaster etc. make hard to make profit
  • Lack of diversity in farming system. There is too much focus on traditional crops like sugarcane, wheat, rice etc. Agro-forestry, horticulture focus etc. is missing.
  • With increasing urbanisation, demand of food products (like meat, milk, fresh vegetables etc.) other than food grains is increasing. But our farming infrastructure is not equipped to tap its full potential. Lack of storage systems, APMC issue etc. are some blockades.
When more than 50% of population depends on agriculture for livelihood, farmers’ welfare is of paramount importance. Government should definitely focus on this. Some suggestions are :
  • 3 pillared approach : Crop Production, Social-forestry and livestock rearing should be promoted
  • There is need to streamline various research and extension services
  • Farmers should be encourages to adhere to adequate quality standards. It helps in promotion of GI tagged products both nationally and worldwide.
  • Subsidies should be rationalised.
  • Agricultural insurance should be promoted
  • Rural health should be revamped, new focus on PHC
  • Education of the farmers childrens, MDM shld be strenthened, etc
Eco Survey notes that to understand the economics of being poor, we need to understand economics of agriculture. Productivity can be translated to profitability by analysing the real climate of agriculture.



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