This document summarizes key points from a presentation on doubling farmers' income in India. It notes that the government set up a committee in 2016 to develop a plan to double farmers' income by 2022. The committee report recommends increasing investment in agriculture by Rs. 640,000 crores, with 80% of funds coming from the government. It also suggests increasing the share of farm income from 60% to 69% by improving productivity, reducing costs and wastage, and facilitating diversification. However, the document questions some inconsistencies and whether resources can be mobilized given other spending priorities. It analyzes growth trends and argues for market reforms to truly incentivize farmers.

1. Ashok Gulati
Infosys Chair Professor for Agriculture, ICRIER
Global Castor Conference, 2018
The Solvent Extractors’Association of India
Ahmedabad, Gujarat
23-24 February, 2018

2.  Feb 28, 2016, PM shared his “dream” to
double farmers’ income (DFI) by 2022 in a
kissan rally in Bareilly
 Feb 29th, 2016, FM mentioned his Union
Budget speech
 April 2016, Govt sets up a Committee to DFI
under Ashok Dalwai, the then Additional
Secretary in MoAFW

3.  14 Volumes Report (8 released so far)
 DFI over 7 years, with base 2015-16 (not
5)
 To raise real incomes, not nominal
(CAGR needed is 10.4%)
 Additional Investment needed Rs
640,000 crores (at 2011-12 prices)
(growth of 22.2% p.a in real terms at
2011-12 prices)
 80 percent of this additional investment
to come from govt (in agri, irrigation,
rural roads, rural energy, and rural
development)
 Raise share of agri in farmers’ income from
60% to 69% (in one place it says even 80
percent)

4.  Lot of useful info, but several inconsistencies
(100 people drafted 14 volumes…Many a times reader feels as if Left
hand does not know what right hand was writing)
 Silent on where the resources (Rs 6.4 lakh cr at
2011-12 prices) will come from?
(In a season of loan waivers, and mounting subsidies and welfare
programs, investments likely to shrink)
 Even if Investments made and agri-growth triples, who will
absorb the agri-surpluses?

5.  Cut costs (neem coating of urea; SHCs)
 Improve prices (MSP cost plus, e-NAM, 22000
haats to be upgraded)
 Reduce wastages (Agri-logistics, food
processing; Operation Greens-TOP)
 Improve productivity (LTIF, micro-irrigation)
 Diversification to Organic, F&V, animal
husbandry, bee keeping (funds for dairy, animal
husbandry and fisheries)

6. 17.3
16.3
16.1
14.8
14.4
13.9
13.6
1.2
13.0
12.0
11.8
11.6
11.3
11.2
10.6
9.8
9.2
7.2
6.8
4.8
8.7
7.8
7.5
6.3
6.0
5.6
5.2
4.9
4.7
3.7
3.6
3.4
3.2
3.0
2.5
1.8
1.2
-0.7
-1.0
-3.0
-5.0
0.0
5.0
10.0
15.0
20.0
GrowthinFarmIncome
Nominal Income Growth Real Income Growth
Source: Situation Assessment Survey, NSSO, 2002-03 and 2012-13
Average Monthly income per agri-household at current prices stood only at
Rs,6426 in 2012-13

7. 7926
3.2
7.8
1.2
3.4
5.2
2.5
3.7
4.7
7.5
4.9
0.4
3.6
6 6.3
5.6
8.7
3
1.8
-3
-0.7 -1
-4
-2
0
2
4
6
8
10
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
RealIncomeGrowth(%)
AverageMonthlyIncome
peragriHH
Total Income Growth in Real Income
Source: Situation Assessment Survey, NSSO, 2002-03 and 2012-13

8. 45.8% 47.9%
4.3%
11.9%11.2%
8.0%
38.7%
32.2%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
2002-03 2012-13
Net Receipts from Cultivation Net Receipts from Farming of Animals
Net Receipts from Non- Farm Business Income from Wages
50%
59.8%

9. 3.7
5.2
1.9
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2004-05 to 2013-14 (10
year of UPA)
2010-11 to 2013-14 (Last
four years of UPA)
first four years of NDA)
All-IndiaAgri-GDPGrowth

10. 9.67
8.59
6.61
6.3
5.4
5.17
4.8
4.65
4.47
4.06
3.5
3.35
3.2
3.17
2.97
2.94
2.41
2.35
1.61
0.47
-0.97
-2
0
2
4
6
8
10
12
PercentageGrowth(%)
Calculated using CSO Data

11. 3.6
5.2
6.2
11.3
9.7
5.2
11.5
19.8
20.9
25.4
18.4
10.5
8.2
0
5
10
15
20
25
0
5
10
15
20
25
30
35
40
45
50
Agri-TradeasshareofAgri-GDP(%)
BillionUSD
UPA-I & II (MMS period) NDA (NaMo period)
Trade Balance (bn USD) (LHS) Total Agri-Exports (bn USD) (LHS)
Total Agri-Imports (bn USD) (LHS) Agri-Trade as share of Agri-GDP (%) (RHS)

12.  Raising farmers’ income from CAGR of 3.5%
to 10.4%...3 times higher jump!!
 Has it been done anywhere else earlier?
◦ Yes, China during 1978-84, farmers incomes
increased by 15% p.a. and halved poverty…
◦ But China did not write a 2000 pages report for
that, it changed basically incentives for farmers

13. 8
35
18
21
0.8
9
41
42
13.7
65
-0.42
86
9
11
37
8
32
2
-6
4
28
10
57
34
19
20.9
-2
11
-4
7
9
4
-9
19
5
36
-7
28
-22.7
-40
-20
0
20
40
60
80
100
ProfitMarginasa%ofC2cost
2012-13 2013-14 2014-15
Source: Cost of Cultivation Data, DES, Gulati and Roy, FAI 2017

14. Market Price is calculated by taking an average of major
mandi prices of largest producing states. [Urad, Moong and
Arhar, Soybean (Madhya Pradesh), Maize (MP & UP), Paddy
(West Bengal)] Source: Agmark.net & CACP Kharif Report
Farmers losing in most kharif
crops.
-22
8
-1
6
11
-9
-36
-45
-27
-19
-10
8
-50
-40
-30
-20
-10
0
10
20
Moong Urad Arhar Maize Soybean Paddy
ProfitMarginasa%ofProjectedC2cost
Kharif 2016 (Nov-Feb)
Kharif 2017 (Nov)
Gulati & Roy, FAI 2017

15. 0
50000
100000
150000
200000
250000
Safety Net Input Subsidies Investment
Amount(Rscrore)
Mahatma Gandhi National Rural Employment
Guarantee Program (Rs 55000 crore)
Food Subsidy (Rs 169323 crore)
Crop Insurance Scheme (Rs 13000 crore)
Interest Subsidy for Short Term Credit to
Farmers (Rs 15000 crore)
Fertiliser subsidy (Rs 70090 crore)
Sub - Mission on Agriculture Extension (Rs
1020 crore)
Deen Dayal Upadhyaya Gram Jyoti Yojna (Rs
6550 crore)
Pradhan Mantri Krishi Sichai Yojna (Rs 9429
crore)
Pradhan Mantri Gram Sadak Yojna (Rs 19000
crore)
Agriculture Research and Education (Rs
7800 crore)
224323
98090
43799

16.  Incentives: Get the markets right
(Trade policy; ban the bans on exports; APMC; ECA; ‘Operation Veggies
TOP’ a la ‘Operation Flood’)
 Investments in/for Agriculture
 Institutional Reforms:
 Liberalize Land lease markets
 Innovations in production technologies and marketing
institutions

17.  Dump the consumer bias in agri-price
policies (means dump ECA, especially storage control
orders, dump APMC, dump export bans and MEPs, etc)
 Dump the dole model and adopt
development model (means reduce food subsidy,
MGNREGA, Farm Subsidies to 20% and increase investments
in/for agriculture to 80% of resources going on them today)