CIFA Appeals to Government through Key Recommendations for Improving Farmers’ Lives and Boosting Nation’s Economy

Hyderabad: The Consortium of Indian Farmers Associations (CIFA), India’s apex professional farmer’s organization engaged in effective policy level interventions on behalf of farmers from all over India, has met with the Union Finance Minister, Smt. Nirmala Sitharaman to participate in pre-budget discussions where it put forth the key concerns and demands for the betterment of the Indian farmers. The essential driver for seriously considering farmer improvement measures both at the operational and the policy levels stems from the need to achieve the GOI’s twin goals of doubling farmer incomes by 2022 and of making India a USD 5 trillion economy by 2025. In order to achieve these targets, it is imperative that the present Government frames and implements a stable long term agricultural and rural policy to ensure that the populace in the rural parts of the country has a level playing field vis-à-vis people of urban India.

Today, agriculture is the only sector which has a net negative ROI as the priority is to keep the inflation low resulting in farmers getting lower price for their produce. This prevents agricultural wealth creation and limits farmers’ ability to invest, expand, and improve farm practices. A precise illustration of this challenging situation is the tobacco farmers who have been severely economically hit by the discriminatory nature of taxation applied on cigarettes in the country. Additionally, on the issue of the most critical input factor—water—for the farmer, it is the responsibility of policy makers to improve the water use efficiency, incentivise low water intensity crop production in areas under canal irrigation to reduce water intensity crops cultivation, and provide live irrigation to rain-fed areas to improve output efficiencies to meet domestic demands and consequently sustain the agriculture sector.

According to Shri Bojja Dasaratha Rami Reddy, Secretary General, CIFA, “To bail out the rural economy from crisis, a strong political will power is needed. We need to increase agriculture productivity, improve soil health, provide effective crop insurance, implement a consistent export import policy, proactive market intervention to attain fair price realization for agriculture produce, total mechanization, technology, encourage animal husbandry, poultry and allied activities.”

Mr. Reddy further added, “The current focus on agri-industrial complexes would only help the rich, while the small and the marginal farmers would be left behind, unless the policy addresses and focusses on small and medium size farmers. If the policy continues to focus on aggregation and modernization which leaves out small and medium farmers, it would only increase income inequalities and will fan social unrest in the country.”

A lot of the Indian economy is inextricably linked with its rural well-being. The state of the farmer’s income can be improved with the help of certain immediate measures. The primary need is for the government to create irrigation facilities where none exist but are needed on priority. Currently, the 23 priority AIBP (Accelerated irrigation benefit programme) projects under PMKSY (Pradhan Mantri Krishi Sinchayee Yojana) bypass most irrigation deprived districts of the country. To improve farmer’s income the PMKSY should focus on the unirrigated half of India’s cultivable land with initiatives such as setting up of a water dispute tribunal, instituting a long term irrigation fund to provide lifesaving irrigation to rain fed areas, and achieving river interlinking to resolve problems in flood and drought affected regions of the nation.

The tobacco farmers in particular appeal to the Government to reduce the Compensation Cess rates on Cigarettes to the pre-GST level. Such a move will be beneficial to the tobacco farming community, as illicit trade will reduce and demand for domestic tobacco will restore to earlier levels which will bring stability in tobacco crop prices and farmer earnings. Due to smuggled cigarettes which do not use Indian tobacco, the offtake of tobacco for manufacture of legal cigarettes has severely been affected, causing shrinkage in earnings of FCV (Flue-Cured Virginia) tobacco farmers by more than Rs.5000 crores since the crop year 2013-14.

CIFA has demanded that the MSP should be fixed at cost (Actual Cost + Family Labor + Land lease Cost) plus 50 percent profit as recommended by Swaminathan Committee. The contribution of agriculture to GDP has remained constant in spite of increased productivity as the prices of agricultural produce have either remained constant or reduced. Thus, inflation needs to be a factor while determining the MSP. Also, The Commission for Agricultural Costs and Prices (CACP) must be made into an autonomous statutory commission with adequate representation of farmer’s organizations.

Credit availability is a big issue for farmers due to which they remain at the mercy of money lenders. In spite of the initiatives taken by the Central and State governments timely credit is not available to the farmers and more so to the tenant farmers. The need to revitalize the farm credit as also the institutions which provide farm credit is of paramount importance. Also, an effective and transparent method of annually recording the tenant farmers for each crop season must be documented for enabling data-supported equitable distribution of loans and subsidies to the tenant farmers.

In order to implement PMFBY in its true spirit, the GOI needs to enforce an effective and egalitarian mechanism to enrol farmers under PMFBY, creation of infrastructure for scientific evaluation of crop losses, and timely release of compensations against crop losses to create confidence among the farmers on the PMFBY.

According to CIFA, the welfare of farming community administration at grass root level has to be strengthened by enforcing the laws to strengthen Panchayath Raj System. Here, the village secretariat scheme introduced by the government of Andhra Pradesh is a move in the right direction as it seeks to provide service at the village level and will increase accountability. This initiative will effectively address all agriculture related issues like ensuring improvement in soil health, availability of crop loans, and marketing of agri-produce, in addition to addressing of the various crop insurance issues such as premium payment, loss evaluation and faster processing of claims. After due analysis of the model this scheme may be extended to other states as well.

The Government needs to be congratulated for initiating the Farmer Producer Companies as these will provide value addition and market agriculture produce at remunerative price points. To promote the concept of Farmer Producer Companies the GOI could take more steps such as extend the benefit given under Section 80P of the Income Tax Act and Expand the scope of the definition of ‘Agricultural Income’ to include the ‘limited return’ and ‘patronage bonus’.

Paddy stubble burning has become a serious environmental Issue. At the same time fodder shortage for cattle is an acute problem in rain fed areas. To resolve these problems GOI may initiate a program to establish “fodder banks” by procuring paddy stubbles. Also, Rural Warehouses have become counterproductive in the last five years since farmers are unable to get MSP even after two years of storage and have to pay back bank loans plus warehousing charges.

CIFA has brought to the fore the fact that in allowing imports 6.6 Million MT of Pulses without taking into account the advance estimates of a surplus crop which has resulted in the farmers across the nation being forced to indulge in distress sale of pulses much below MSP. The farming community also demands an Income Security Act for farmers, tenant farmers, and farm laborers. The Consortium has asked that the stock limits imposed under Essential Commodities Act are curtaining demand for farm produce and prices. Thus, all the restrictions on stock, movement restrictions of agriculture produce need to be removed. In addition to the above, CIFA has urged the government for a few additional urgent steps to be taken to promote rural welfare and boost farmer incomes. These include Zero Percent GST on all Agri-Inputs and Equipment, manifold increase in Investments in Agriculture Sector, and Continuation of Rice export Incentives.

In order to create demand for agri-value added products, all foods, processed or otherwise, should be zero rated for GST so that a large part of the agri-produce is processed thereby reducing the agri wastage which in turn will increase the income of the farmers.

The important demand of incentivizing tobacco exports by including tobacco under Merchandise Exports from India Scheme (MEIS) to improve the prospect of locally grown Indian tobacco and improve farmer’s income has also been mooted. This assumes enormity in face of the unfortunate fact that the tobacco farmers in the country are suffering from a continuous drop in earnings, due to shrinkage in demand for domestic cigarette tobacco.

A key demand was to the end that the state must support the aqua farmers, dairy farmers, tobacco farmers, coffee farmers. This is important in the wake of the welcome ‘Make in India’ drive since the time has come to prepare these farmers to face competition from the world and this has to be done by the state agencies on a war footing. Lastly, the Consortium has sought the establishment of Commodity groups at regional levels with integration at national levels to facilitate the promotion of horticulture crops. These commodity groups will interact with Agricultural and Processed Foods Products Export Development Authority to promote these crops in foreign markets.