Irregularities in Centre’s drip irrigation scheme in Jharkhand: How the Express investigation progressed, what it showed

On Friday, the Jharkhand government set up a four-member panel to carry out a “high-level investigation” into the “widespread irregularities”.

What is the “Per Drop More Crop” scheme?

PDMC-MI is a central government scheme to promote micro irrigation — drip or sprinkler systems — which is implemented by the Department of Agriculture & Farmers’ Welfare, with roughly 40% central funding. (The rest is financed by states and farmers themselves; some states like Jharkhand and those in the Northeast have a different break-up.) The scheme was launched in 2006 and was subsumed into the Pradhan Mantri Krishi Sichai Yojna (PMKSY) in 2015 as one of its four components.

The main objectives of PDMC-MI are to enhance water-use efficiency and increase productivity, thus bolstering farmer incomes. The operational guidelines say the scheme is meant mostly for so-called water-guzzling crops like sugarcane, cotton, and banana, even though cereals and pulses may also be brought under its ambit.

States are supposed to install irrigation infrastructure, conduct publicity campaigns, create market linkages, and provide training and other expert support.

The Express Investigation focussed on drip irrigation systems, which are costlier than sprinkler systems. In drip irrigation, water is targeted directly at the roots of crops using emitters that are fitted on a lateral tube.

Why is this scheme important for Jharkhand?

The state’s agricultural economy, especially its major crop, paddy, is predominantly rain-dependent. In 2022, Jharkhand suffered its worst drought in 122 years on record during the June 1-August 15 paddy sowing season.

Drip irrigation can be of great help in this situation — it enhances water-use efficiency by cutting water usage by roughly 70%, doubles productivity, assures energy savings, and helps directly deliver fertilisers to crop roots.

Effective operation of PDMC-MI — which was first introduced in the state in 2010-11 — can potentially reduce distress outmigration and deliver a climate-resilient solution for the agrarian economy. In 2022-23, Jharkhand claimed to have achieved its highest-ever coverage (6,049 hectares) under the scheme with an estimated expenditure of Rs 49.73 crore, benefiting 8,960 farmers. In the previous year, Rs 68.71 crore was spent to cover 4,868 ha; 8,198 farmers were added as beneficiaries.

How were the farmers and companies chosen?

State governments are required to identify the places where drip/sprinkler irrigation can be used; then, companies that can provide the irrigation infrastructure, and the scheme’s beneficiaries are identified.

In Jharkhand, the enrolment process is controlled by the companies, who in most cases reach out to farmers and apply to the agriculture department on their behalf, and then receive work orders from the district office of the department. This process often does not reflect the farmer’s opinion on drip irrigation or his willingness to buy into it.

Companies are enlisted as PDMC-MI providers in the state for a period of five years through a tendering process, but each enlisted company has to re-register every year. Every district is allotted 4-5 companies.

And how does the scheme work?

The contracted companies install drip irrigation systems on the beneficiaries’ land, up to a ceiling of 5 ha (12.3 acres), contiguous or otherwise.

Contract farmers, those who have taken land on lease, are also eligible if they can produce a lease agreement for a minimum period of seven years from the date of approval of the application. Beneficiaries to have already availed of the scheme are barred for the next seven years.

The subsidy amount — paid to the companies by the government — depends on various factors, including water requirement, plant to plan spacing, water quality, and specific local factors. As per PDMC-MI guidelines, in Jharkhand, “the cost of the drip system is likely to be higher” due to various factors such as a smaller presence of manufacturing companies that leads to higher costs of transportation, the considerable efforts that companies have to make to prepare farmers to adopt the technology, and the higher cost of providing after-sales service.

Rates for drip irrigation systems in “low penetration” states like Jharkhand range from Rs 20,710 to Rs 65,827 per acre. This paper found that most companies in Jharkhand charged more than Rs 50,000 per acre for installing drip irrigation systems.

Is there a verification process before and after installation?

On paper at least, the process of applying for and receiving assistance under PDMC-MI incorporates various steps to ensure transparency and honesty within the system.

Pre-installation, the farmer fills out a form with all personal details, including Aadhaar, and attaches an affidavit detailing the land in possession. The mukhiya of the panchayat attests the documents, and a panchayat member or a government official certifies the authenticity of the details to the best of their knowledge.

Post-installation of the drip irrigation infrastructure, the farmer writes a “satisfaction letter” stating that he has not received any subsidy, the installation is complete, and the requisite training has been provided to him. The farmer must also make a video statement, geotag it with the latitude and longitude of the farm with the drip irrigation equipment, and send it to Nabcons, the consultancy arm of the National Bank for Agriculture and Rural Development (NABARD), for verification against the beneficiaries’ Aadhaar details.

The problem, however, is that Nabcons relies on company agents/ representatives to reach the beneficiaries, which leaves scope for manipulation of data. The Express Investigation found that middlemen (company agents) and Nabcon verification personnel were in cahoots.

Irrespective of the third party verification, the agriculture department is supposed to conduct verification exercises for 50% of beneficiaries — this does not happen currently.

What happens if these norms are violated?

The operating guidelines say that any violation with regard to the quality, maintenance, etc., must be viewed very seriously and penalties imposed.

Violations related to the submission of bills “without installation/ partial installation, wrong invoicing, variations in component specifications, submission of wrong documents” may be dealt with as required, including action under sections of the Indian Penal Code.

To what extent were these norms followed in Jharkhand?

The investigation found numerous violations — Aadhaar cards were misused to create “ghost” beneficiaries with farmers completely unaware that money was being collected by private companies in their name; brand new equipment was gathering dust; and third-party verification by Nabcons was repeatedly falsified to beat the system.

A nexus of middlemen, company agents, and Nabcons field monitors have allegedly colluded to fulfil the beneficiary targets of the scheme. Gullible or ignorant farmers have been made beneficiaries, the area under drip is shown to have increased on paper, and products have been dumped.

How did The Indian Express carry out the investigation?

The investigation looked at PDMC-MI during April and in the first week of May, using data sourced from the agriculture department. It scrutinised panchayat records to locate beneficiaries and check how much land they possessed. Off-the-record meetings with sources, including elected panchayat members, helped zero-in on probable fake beneficiaries and forged genealogy documents. A source in Nabcon confirmed or corroborated the dodging of the verification process in several cases.