ASHA’s Suggestions related to Agriculture & Farm Livelihoods for Budget 2020-21

December 16, 2019

Dear Smt. Nirmala Sitharaman,

Greetings! Alliance for Sustainable and Holistic Agriculture, also known as ASHA-Kisan Swaraj, is a national network of organizations and individuals working for sustainable farm livelihoods, advocating for income security for farm households, ecologically sustainable agriculture, protection of rights over resources and access to safe, nutritious food for all.

As the Union Budget for 2020-21 is being prepared, we urge the government to announce some major measures that seriously address the extent of crisis that is being faced by India’s farmers, and go beyond tinkering with a few schemes and allocations. We present our suggestions below.

1.    MSP and PM-AASHA scheme: One of the major promises of the last two Budgets has been that not only will Minimum Support Prices be increased significantly but every farmer will receive the Minimum Support for their crops. In September 2018, the PM-AASHA scheme was launched under the evocative name of Annadata Aay Sanrakshan Abhiyan. This scheme was meant to ensure Income Security for farmers.

However, in the past three seasons since the launch of the scheme, i.e., Kharif 2018, Rabi 2019 and Kharif 2019, most of the farmers in the country received prices which are much below MSP. This is the time when PM-AASHA should have kicked in as an intervention. However, both the expenditure and allocation under the PM-AASHA scheme have been very low. The PM-AASHA scheme includes the Price Support Scheme, Price Deficiency Payment Scheme and Private Procurement and Stockist Scheme. The allocation for all schemes put together under PM-AASHA was only Rs.1500 crores in Budget 2019-20.

Our estimate is that PM-AASHA needs expenditure of between Rs.50,000 crores to Rs.100,000 crores if the promise of MSP is to have meaning. Some of this would be in the form of a Fund whose expense would be recovered when the produce procured under PSS scheme is disposed.

Farmers are in huge distress because of not being able to realize a Remunerative Price, whether it is for millets like bajra and jowar, pulses like tur and moong, oilseeds like groundnut, or even paddy in half the country, especially eastern India. When the government which gave enormous publicity to the increased MSPs fails to ensure that farmers actually get the MSP, it is seen as a fundamental failure of the government. The government should also enact a legislation that guarantees remunerative prices for all farmers along the lines created by the All India Kisan Sangharsh Coordination Committee (AIKSCC).

There should be no question of reducing our food subsidy bill, and in fact, we should get a permanent solution in the WTO that will allow India to expand its PDS system to include millets, oils and pulses, for a win-win between producers and consumers.

2.   Farmers Income Commission: As 4 years have passed from the government’s announcement of its promise of Doubling Farmers’ Income, so far, the promise has been confined to reports and statements. To bring further seriousness and credibility to this promise of doubling farmers’ income, the government should announce the constitution of a National Farmers’ Income Commission.

This should be a standing Commission backed by a statute, whose mandate would be to assess farmers’ incomes across the country, in different regions under different crops, and to analyze and recommend the specific steps that need to be taken to achieve doubling of farm incomes. It would also serve as an assessment of how far the incomes have improved in the first four years.

3.   Inclusion of Tenant Farmers and Sharecroppers: The number of tenant farmers and sharecroppers has increased enormously across states, ranging from 20% to 50% of the total cultivators. They are among the high-distress category, and account for 75% of farmer suicides in some states. The Finance Minister in the Budget speech 2018-19 specifically announced that tenant farmers will be identified and included in agricultural credit and government support systems but so far, very little progress has been made. As a consequence, about 25% of the crop loans, interest subvention, crop insurance and disaster relief outlay is being wasted by going to non-cultivating land owners.

a.   Immediately, PM-KISAN scheme should include tenant farmers and sharecroppers as beneficiaries, and a specific allocation of up to Rs.20,000 crores should be made for it.

b.   States should be incentivized to immediately put in place system for identification and registration of actual cultivators, whether tenant farmers or sharecroppers or women farmers or adivasi farmers. There are experiences from the Andhra Pradesh Licensed Cultivators Act which establish how it can be done, and also experiences of Kalia scheme in Odisha, FRUITS portal in Karnataka to draw from.

c.    Identity cards issued to tenant farmers and share croppers should enable them to access crop loans from banks with interest subvention. Credit Guarantee Fund of Rs.10,000 crores should be established to increase confidence of banks to lend to tenant farmers.

d.   The current guidelines on Bhoomiheen Kisan lending should be modified to ensure that crop loans given to Joint Liability Groups of Bhoomiheen Kisan should be at low interest rates, applying whatever interest subvention is available to individual farmers. All terms and conditions that apply to KCC scheme have to be applied to Bhoomiheen Kisan scheme also, apart from interest subvention which is needed mainly by this group.

4.    Freedom from Indebtedness Act and Commission: Agricultural indebtedness is a major part of the crisis pushing farmers into distress and suicides. This is being exacerbated with the increased incidence of droughts, untimely rains and other natural calamities. The answer from the political system has been for various state governments to announce loan waivers once in 5 years or 10 years, typically as an election promise. Clearly, this is not the answer. Especially without support from the Centre, these loan waiver packages have fallen far short of what they promised – whether in Punjab, U.P., Maharashtra, Telangana or A.P. – often leaving farmers in a worse state.

What is instead required is a systemic measure of protection from indebtedness when the farmer loses a crop due to no fault of his or hers. Rather than periodically resorting to a blanket loan waiver as a compulsion, what we propose is ‘Freedom from Indebtedness Act’ to set up a Farmers’ Disaster and Distress Relief Commission.

Similar to bankruptcy protection and limited liability provisions for companies, when there are natural calamities, price crash, large-scale pest or disease attack, such distress-affected areas or distress-affected crops should be identified immediately in the same season, and some measure of debt relief should be provided. It can vary from interest waiver to loan rescheduling to partial or complete loan forgiveness in the extreme cases. The Commission can also address debt to private dealers and moneylenders which forms more than 50% of the debt burden of the farmers.

A Bill for this purpose along with the modalities of the Commission is already available, drafted through extensive farmer consultations across the country by All India Kisan Sangharsh Coordination Committee.

5.    Scaling up investments on risk-reducing ecological agriculture: The Paramparagat Krishi Vikas Yojana (PKVY) is the first national level scheme of its kind which seeks to promote organic farming and thereby, resilient farming to reduce riskiness in agriculture. This investment is also to be seen as both a mitigation as well as adaptation effort in the context of climate change, given that this approach reduces GHG emissions, as well as captures more carbon in the soil. However, the Budget allocations in the first 3 years have been Rs.203 cr., Rs.300 cr. and Rs.325 cr.

The outlays for PKVY, to include different approaches to agro-ecology, may be increased to at least 1000 crore rupees. Within this, a specific component of reviving traditional crop/seed diversity in all farms of India may be introduced, to complement the efforts of revival of traditional cattle breed and agro-ecological farming.

6.    Natural Disasters including drought and floodsare a major cause of farm distress. Farmers reeling from two consecutive years of Drought got very little timely support from the government – as established in the Supreme Court too. A serious overhaul of the Disaster Relief system is urgently required, including the institutional machinery between Finance, Home and Agriculture Ministry streamlined and overhauled. Meanwhile, outlays for disaster relief to farmers should be increased to at least 25000 crore rupees, going by the drought experienced this year in various states (this is based on requests from states after their assessment of loss) for SDRF/NDRF to respond promptly to extreme weather events even as crop insurance system has to be improved drastically.  

7.    Major overhaul of PMFBY required: The experience of Pradhan Mantri Fasal Bima Yojana has been quite poor so far in providing claims benefit to disaster-affected farmers, particularly in comparison to the funds being paid by the States and the Centre to the insurance companies. A detailed consultation should be organized with farmers and farmer organizations to understand and uncover all the problems being faced, and the possible solutions.

8.    Rethink DBT in Fertilizer Subsidy: It has serious implementation problems, and once again, the actual cultivators including tenants and sharecroppers will be left out and the subsidy will instead go to whoever has the patta passbook for the land.

9.    Specific support to Women Farmers: Please initiate specific schemes to support women farmers, including special R&R packages for women farmers in farm-suicide families. Here, Direct Income Transfer Schemes like PM-KISAN should be into women farmers’ account, to balance the fact that patriarchy has put land ownership mainly in the hands of male farmers. There should at least be a policy of transferring into joint accounts of cultivator and spouse.

10. Livelihood revival through Khadi and Indian species of cotton needs support and incentives: After the many problems caused by Bt cotton and large scale monocropping of hybrid American species cotton, there is now a conscious effort to promote desi/Indian species cotton and revive rural livelihoods in value chains that range from farm to garment wearer. It is important that Khadi and other handcrafts are put under 0% GST and out of the purview of GST regime completely, even for enterprises outside the KVIC fold, and for khadi garments too (not just running fabric).

11. FPOs need greater investments and non-interference from the government: The new intervention that supports 10000 FPOs through government infusion of equity is welcome. However, this should not result in voting rights and political/government interference in the FPO governance. This kind of investment should be increased with the current NABARD support also being enhanced and changed to include grant+credit combination products.

We hope that the upcoming Budget will be a meaningful one with substantive allocations and policy measures which will really benefit the small, marginal, tenant, women and adivasi farmers.

Sincerely,

Kirankumar Vissa                          Kavitha Kuruganti

National Co-convenor                    National Convenor

Ph: 9701705743                           Ph: 8880067772

Email: kiranvissa@gmail.com            Email: kavitakuruganti@gmail.com