With agriculture prices remaining depressed over time and terms of trade turning against the farmers, the natural policy response was to provide them a direct income support scheme, Department of Economic Affairs Secretary Subhash Chandra Garg said Saturday.
Existing policy interventions were insufficient to mitigate farm distress, Garg said — and the direct income support scheme “marks a very major departure in the history of the country… of trying to deliver a benefit to the people who it is intended for”.
The interim budget 2019-20 announced a scheme to provide Rs 6,000 yearly income support to farmers directly in their bank accounts.
“…In a situation where the production in the country for most crops is more than the consumption requirement, which has depressed the prices of agricultural commodities and terms of trade are changing against the farmers… the next evolution in policy is to ensure that they have direct income support,” Garg said in an interview with The Sunday Express.
The policy for supporting farmers have moved from growth itself taking care of farmers, to interventions like farm subsidies and Minimum Support Prices, and now to direct income support, Garg said.
“The trickle-down theory has been abandoned 50 years back. There is no trickle-down theory being practised in India at this moment. The direct beneficiary programmes were launched in the country, starting with that small farmer development agency way back in 80s, early 80s and 70s. So the trickle-down theory that economic development would make everyone get the share of the pie was long gone. So it’s not that currently it’s being abandoned. We are actually moving to the next level of policy evolution,” he said, alluding to the direct income support scheme.