Budget 2020: Need to address key challenges in farm sector for doubling farmers' income, says Economic Survey
The survey suggests that there is also a need to reallocate labour resources to other sectors, give increased focus on exploring global markets for agricultural commodities, besides supplementing efforts of farmers with direct income support.
To achieve the target of doubling farmers' income by 2022, the Economic Survey on Friday said there is an urgent need to address some of the basic challenges like credit, insurance coverage, and irrigation facilities in the agriculture and its allied sectors.
There is also a need to reallocate labour resources to other sectors, give increased focus on exploring global markets for agricultural commodities, besides supplementing efforts of farmers with direct income support, it said.
"The realisation of the objective of doubling farmers' income necessitates the addressal of some of the basic challenges of agriculture and allied sector," according to the Economic Survey 2019-20 tabled in Parliament.
Issues such as investment in agriculture, water conservation, improved yields through better farming practices, access to market, availability of institutional credit, and increasing the linkages between agricultural and non-agricultural sectors need urgent attention, it said.
According to the survey, the coverage of irrigation facilities needs to be extended while ensuring an effective water conservation mechanism.
An inclusive approach to provision for agricultural credit has to be undertaken to address the issue of skewness in its regional distribution, it added.
As the proportion of small and marginal holdings is significantly large, land reform measures like freeing up land markets can help farmers improve their income.
The survey further said allied sectors such as animal husbandry, dairy, and fisheries, need to be given a boost to provide an assured secondary source of employment and income, especially for small and marginal farmers.
Given the fact that the livestock sector has grown at a compound annual growth rate (CAGR) of nearly eight percent over the past five years, it assumes an important role in income, employment, and nutritional security, it said.
"Livestock income has become an important secondary source of income for millions of rural families and has assumed an important role in achieving the goal of doubling farmers' income," it added.
Noting that farm mechanisation helps the Indian farming transform into commercial from subsistence farming, the survey said there is also a need to address the issue of lower farm mechanisation in India which is only about 40 percent, as compared to about 60 percent in China and around 75 percent in Brazil.
As a well-developed food processing sector ensures a better return to the farmers and promotes employment, the survey said "more focussed attention" is required to be given to the sector for its significant role in reducing post-harvest losses and creation of an additional market for farm outputs.
The food processing sector is growing at an average annual growth rate of more than 5 percent over the last six years ended 2017-18, it added.
While government measures are in operation aimed at improving productivity and its marketing, efforts of farmers need to be supplemented with better coverage of direct income or investment support.
"There is a need to give increased focus on exploring global markets for agricultural commodities to give an additional source of market for the surplus of agricultural produce India currently has," the survey noted.
There is also a need to reallocate labour resources to other sectors. Though the structural transformations involved a falling share of the agriculture sector and rising share of services sector jobs, more needs to be done to create manufacturing jobs to absorb the large pool of workers, it said.
Stating that agriculture and its allied sectors remain important sectors, the survey said it is because of its continued role in employment, income, and most importantly, in national food security.
Their contribution to national income has gradually declined from 18.2 percent in 2014-15 to 16.5 percent in 2019-20, reflecting the development process and the structural transformation taking place in the economy.
(Edited by Suman Singh)