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How Telangana supports farmers with Rs 4,000 for every acre they own

A look at the scheme Rythu Bandhu, seen by Arvind Subramanian as a template for agriculture policy.

Written by Sreenivas Janyala | Hyderabad |
July 16, 2018 1:03:35 am
 Telangana, Agriculture income support, Telangana farmers, Telangana farm subsidy, Arvind Subramanian, Rythu Bandhu scheme, Telangana government, K Chandrashekhar Rao, Called Rythu Bandhu, the scheme involved cheque payments to farmers based on their landholdings. (Illustration: Sarfaraz Alam)

A support scheme for farmers in Telangana has earned the appreciation of outgoing Chief Economic Advisor Arvind Subramanian, who spoke about it during an Idea Exchange interaction with The Indian Express journalists and then wrote in The Financial Express that it can be the template for social and agricultural policy. Called Rythu Bandhu, the scheme involved cheque payments to farmers based on their landholdings.

What it provides
Under Rythu Bandhu, the Telangana government gives every beneficiary farmer Rs 4,000 per acre as “investment support” before every crop season. The objective is to help the farmer meet a major part of his expenses on seed, fertiliser, pesticide, and field preparation. The scheme covers 1.42 crore acres in the 31 districts of the state, and every farmer owning land is eligible. Officials said 92% of the beneficiaries own less than 5 acres, 5% own 5-10 acres and the remaining 3% own more than 10 acres.

Principal Secretary (Agriculture) C Parthsarathi said: “Over a period of four or five years, Telangana farmers will be rid of all debts due to Rythu Bandhu scheme. Indebtedness among Telangana farmers is very high and they fall into the vicious debt trap of moneylenders. Farmers also apply for loans from banks which get delayed as they don’t approve quickly in time for the crop season. Rythu Bandhu money provides that cushion to the farmer because with that money the farmer can purchase seeds and fertiliser and start sowing. If a bank approves his loan later then it is of additional help to hire farm labour etc but at least he is not going to moneylenders.”

The scheme was announced by Chief Minister K Chandrashekara Rao in February and was launched on May 10. Before that, the revenue department overhauled the entire land holding records and issued new pattadar passbooks for land ownership. Cheques ranging from Rs 1,000 to Rs 1 lakh were issued to 57.33 lakh farmers depending on landholding, amounting to Rs 5,600 crore. However, due to discrepancies in names or survey numbers, at least nine lakh cheques could not be encashed and these have been returned. Parthasarathi says the mistakes are being rectified. Over 5,000 village revenue officers and agriculture extension officers will keep a tab on whether a farmer who received the subsidy has sowed the crop or not.

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The government had initially drawn up a list of 72 lakh beneficiaries based on a revenue department survey last year. “Lack of proper land records resulted in the total being shortlisted at 57.33 lakh. The records are still under rectification and more farmers will be added to the list later,” said Karuna Vakati, special officer for the scheme.

The government plans to extend the flat Rs 4,000-per-acre subsidy to the rabi season as well, with distribution of cheques from November 18. “We fixed the subsidy at Rs 4,000 per acre after a study showed that to be roughly what a farmer spends on seed, fertiliser, pesticide, and field preparation. That apart, we are giving free 24-hour electricity for agricultural pump-sets. Both schemes together will take a huge load off farmers’ shoulders and they need to now pay for hiring labour,” said Agriculture Minister Pocharam Srinivas Reddy.

The government has allocated Rs 12,000 crore for Rythu Bandhu in 2018-19; the 24×7 free power supply to farmers is estimated to cost another Rs 1,000 crore. The government will issue cheques rather than make direct benefit transfer (DBT) because banks might use the DBT money to adjust against farmers’ previous dues. The cheques have been distributed along with free Pattadar Dharani passbooks with updated information including ownership and land purchase and sale.

Rich, poor & tenants
The Rythu Bandhu scheme has come under criticism on two major counts. The first is that it does not exclude rich farmers and wealthy landlords. The scheme does, however, have a provision under which cheques can be returned to the local authorities. All ministers and most top IAS and IPS officers who own farmland, in fact, have reportedly returned the cheques. The second criticism is that the scheme leaves out tenant cultivators — an estimated 40% of Telangana’s farming population and mostly coming from the poorest and most disadvantaged backgrounds.

“Tenant farmers cannot be included in the scheme as they cannot submit any proof of cultivation of land, which is done mostly based on informal and oral lease arrangements. One year they are cultivating land in one village and the next year they move to a different village. It is very difficult to identify them. If they are included in the scheme, it will lead to unnecessary litigation. The real owners will go to court if their tenants are treated as farmers and extended support,” said C Parthasarathi.

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