Farmers in India are being spoilt by politicians through populist measures such as loan waivers, and this can have an adverse impact on the agriculture sector in the long run, Niti Aayog member Prof Ramesh Chand said on Tuesday.
Delivering the first Dadabhai Naoraji lecture on the issues of inequality and growth in the agricultural and rural sectors, at the National Institute for Advanced Studies here, Chand called for adoption of reforms by states, including a model contract farming law proposed by Niti Aayog, to accelerate agricultural growth and reduce inequities.
“Expectations of farmers are becoming more and more unreasonable,” Chand said. “They want free water, free fertiliser; they want loan waivers, and they want governments to pay 50 per cent of price of the cost of production. No country can meet these kind of things.”
According to Chand, farmers are not “as excited about increasing agricultural production as they were at the time of Green Revolution”. He said, “Largely, farmers of this country are being spoilt by politicians through their commitment to populism. This will be adverse for this sector.”
Farm income per cultivator in India as per Niti Aayog estimates is Rs 9,761, and if a farmer has no other sources of income then as many as 53 per cent of farmers are below the poverty line, Chand said. “This speaks of a need to take farmers out of agriculture, or creating norms for employment for them. Even if we consider non-farm income of farmers, 22.5 per cent of farmers on an average are below the poverty line. In some states it is as high as 45 per cent,’’ he said.
The disparity in income between agricultural sector and other sectors has aggravated after 1991 due to lopsided reforms, which have not touched the agriculture sector, he maintained.
“After 1991, non-agriculture growth began accelerating and agricultural growth remained at around 2.8 per cent. If you take the co-relation between growth rate of the two sectors over a 10-year period, we see that it was 0.9 (per cent) till 1991 and a constant…it has now suddenly dropped, and is now 0.4 per cent,’’ Chand said.
“Reforms were done in the non-agricultural sector but not in agriculture. As a result, there is no modern capital or new ideas coming into the sector. There is no competition, and between the producer and consumers there are five to six intermediaries,’’ he said.
The Niti Aayog is now aggressively pushing states to carry out reforms for liberalisation of the agriculture sector to improve farmer income and agriculture.