Don’t go for DBT of fertiliser subsidy: Farm bodies to finance minister
Farmers’ organisations and
experts have sought that the government ignore suggestions for ‘direct benefit
transfer’ (DBT) of fertiliser subsidy. They have also demanded setting up of a
high-level commission to deal with farmers’ issues.
These are parts of multiple
suggestions submitted by farm experts and farmer groups to finance minister
Nirmala Sitharaman earlier this week as inputs during pre-budget consultations
on the agriculture sector.
Their other suggestions are inclusion
of tenant farmers and share-croppers under ‘income support scheme’ (PM-Kisan),
legislation to ensure income security for farmers, separate skill registry for
agri work force, revamping of crop insurance scheme, removal of GST on agri
inputs, creating a market intelligence system and registration of actual
cultivators.
“A system where subsidy is given in
the name of the farmer can objectively be reviewed when farmers’ organisations
form a part of the review process. Savings could be in thousands of crores,”
Ajay Vir Jakhar of Bharat Krishak Samaj suggested to the ministry while seeking
scrapping of the proposal to give fertiliser subsidy through DBT.
Jakhar, who attended the pre-budget
meeting on Tuesday, said fertiliser subsidy through DBT would have only one
winner — the fertiliser industry. “It is solely designed to transfer the burden
of collecting subsidy from the industry to farmers,” he said.
Similar suggestions were forwarded by
another farmers’ group, Alliance for Sustainable and Holistic Agriculture
(ASHA), which wants a “rethink” on the issue.
“It has serious implementation
problems, and once again, actual cultivators including tenants and
share-croppers will be left out and the subsidy will instead go to whoever has
the ‘patta’ passbook for the land,” said Kavitha Kuruganti of ASHA.
Bharatiya Kisan Sangh (BKS), the farm
wing of Rashtriya Swayamsevak Sangh (RSS), is learnt to have suggested in the
meeting that there should be zero GST on farm inputs such as fertilisers, seed
and agri equipment. It also sought that the ministry ban futures trading in
agri commodities, arguing that the current practice did not benefit consumers
and farmers.
Since tenant farmers and
share-croppers currently miss the benefits under various schemes, including
PM-Kisan which allows only landholders to get Rs 6,000 per annum, ASHA sought
to highlight their plight. It demanded that the PM-Kisan scheme should include
tenant farmers and share-croppers as beneficiaries, and a specific allocation
of up to Rs 20,000 crore should be made for it in the next budget. Both ASHA
and Bharat Krishak Samaj suggested setting up a high-level statutory farmers’
commission. Demanding that the government announce the constitution of a
National Farmers’ Income Commission in its 2020-21 budget, Kuruganti said,
“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 analyse and recommend specific steps that need to be
taken to achieve doubling of farm incomes.” Referring to Bharat Krishak Samaj’s
suggestion on ‘statutory farmers’ commission’, Jakhar said, “Its mandate must
include to review existing interventions, recommend new initiatives, re-purposing
of existing subsidies and allocation of resources.”
The Pradhan Mantri Kisan Samman Nidhi
(PM-Kisan) scheme has transferred financial benefits to around 7.6 crore
farmers till November 30.
Interestingly, more than 20 per cent of the
beneficiaries are from Uttar Pradesh.
The Centre had implemented PM-Kisan, an
income support scheme for farmers to enable them take care of expenses related
to agriculture and allied activities as well as domestic needs, with effect
from December 1, 2018.
Launched on February 24, the scheme
provides eligible beneficiaries ₹6,000 a year, in three instalments of ₹2,000
each.
In a written reply in the Lok Sabha,
Narendra Singh Tomar, Union Minister of Agriculture and Farmer Welfare, had
stated that 7.6 crore got the financial benefit under ‘PM-Kisan’ scheme till
November 30. His reply had estimated the number of holdings for transfer of
benefits at 14 crore till November 30.
In another reply, the Minister gave
State-wise break-up of beneficiaries. According to that list, the number of
beneficiaries from Uttar Pradesh stood at 1.70 crore, accounting for around
22.37 per cent of total number of beneficiaries. It was followed by Maharashtra
at 70.47 lakh (9.26 per cent), and Karnataka at 46.91 lakh (6.16 per cent).
Around 32.81 lakh (4.31 per cent)
beneficiaries from the North-East States got the benefit of the scheme till
November 30.Of the 7.6 crore beneficiaries, 5.96 crore (78.36 per cent) were
from the general category, 92 lakh (12.09 per cent) from the Scheduled Castes (SC)
category, and 72.55 lakh (9.53 per cent) were from the Scheduled Tribe (ST)
category.
The share of beneficiaries from the ST
category stood at 99.59 per cent in Nagaland, 97 per cent in Meghalaya, 95.43
per cent in Mizoram, 84.27 per cent in Manipur, and 52.97 per cent in Tripura.
There was no SC beneficiary in Punjab till
November 30.
The Minister said in the reply that ₹75,000
crore wasallocated for the scheme for 2019-20, and around ₹35,000 crore has
been disbursed so far.
According to data available on the
‘PM-KISAN Samman Nidhi’ portal, the total number of beneficiaries stood at 8.45
crore (as on December 20). Of this, UP accounted for a major share of 1.92
crore beneficiaries. This was followed by Maharashtra (79.59 lakh), Rajasthan
(56.11 lakh), Madhya Pradesh (53.45 lakh), Andhra Pradesh (50.76 lakh) and
Bihar (50.45 lakh).
The PM-Kisan as a tool to prop up sagging
rural demand, recording of tenancy to help the real cultivators and
streamlining of agricultural subsidies could be three important themes for
Indian agriculture in 2020.
With the defeat in the Assembly elections
in Madhya Pradesh, Rajasthan and Chhattisgarh in December 2018, the Government
realised that to win rural votes in the General Elections in May 2019, it
needed to do something big and urgently. It found ₹20,000 crore in 2018-19
(Revised Estimate) and PM Kisan was announced in the Interim Budget. An amount
of ₹6,000 per annum was to be paid to all small and marginal farmers with
retrospective effect from December 2018.
Direct income support to farmers has been
under discussion for several years but it was always felt that the country
cannot afford it and it can only come in lieu of other subsidies. After the
elections, the Government allocated ₹75,000 crore in the 2019-20 and in a wrong
decision, extended it to medium and big farmers also.
During December 2018-March 2019, 4.74 crore
landholders received the money under PM-Kisan. However, the scheme slowed down
a bit and from April to November 2019, with only ₹36,000 crore paid to farmers.
In a slowing economy, faster pace of transferring money can help in increasing
rural demand. An incidental benefit of PM-Kisan is correction of land records
but precise data on progress made has not been made available.
So far, money under PM-Kisan has been given
to all land holders and the Government has not differentiated between rain-fed
farmers and irrigated farmers or crops procured and not procured. The
government can begin with rain-fed areas as they are more deserving than big
farmers in irrigated areas.
Subsidies to agriculture in 2013-14
amounted to ₹1.36 lakh crore (at 2011-12 prices). It is known that they are
inefficiently utilised. Can the model of PM-Kisan be used to directly transfer
existing subsidies on bank interest, electricity, irrigation and fertiliser,
etc?
Since money under PM-Kisan has gone to land
holders recorded in revenue records, the tenant farmers and actual tillers have
been left high and dry. There is no data to show that landlords have shared
their income from PM-Kisan or reduced their rentals for tenants.
This is the crux of problem due to which
there is no progress on direct benefit transfer (DBT) of urea subsidy (₹57,099
crore in 2019-20). It is feared that DBT of fertiliser subsidy will go to land
holders and actual cultivators will find urea at market prices too expensive. This
may adversely impact food production. So the correct identification of tenant
farmers, who actually cultivate the land (but do not own it), is necessary
before DBT of fertiliser can be undertaken.
The Centre has to play a leading role in
resolving this long enigma of actual cultivators not getting benefit of
agricultural subsidies.
In 2020, the Government would do well to
focus on rural economy.
The author was a Union Agriculture
Secretary. Now, he is Visiting Senior Fellow, ICRIER.
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