Tag: agriculture funds

Five Things the Govt Needs to Do to Mitigate Rural and Migrant Distress

The dire situation induced by the nationwide lockdown is now threatening to undo the last few decades of work in poverty alleviation.

The outbreak of the novel coronavirus and the subsequent nationwide lockdown measures have accelerated simmering rural-agricultural distress. Migrant workers who have recently returned to their native villages are but another critical dimension of the deteriorating situation.

The dire circumstances are now threatening to undo the last few decades of work in poverty alleviation by pushing families back into poverty. Instances of severe food shortages, amongst families who were already on the brink, have emerged. Now the challenge is not just to stop families from slipping into poverty but devise ways to revive, restore and rebuild the rural landscape.

The big announcement of Rs 20 lakh crore and the subsequent economic packages announced by the finance minister did little to allay fears during the ongoing crisis. In the long term, the impetus to rural infrastructure, steady loans for rural enterprises, connecting agriculture markets and such measures might help, depending on how all of it is operationalised.

Here is a five-point agenda to put rural lives on a path which can revive and restore livelihoods.

The first one, by unanimous consensus, is MGNREGA. Currently, ‘active’ job cardholders are estimated to be around 7.65 crore. Even if all of them get the assured 100 days’ work, the budgeted amount after a Rs 40,000 crore increase is not adequate. There is every likelihood that a higher number of workers would seek MGNREGA employment this year.

The average labour days worked by a household has been in the range between 45 and 50 days per household for the last couple of years. It is amply clear by now that this figure is not because rural households have received the workdays they wanted, but rather because of suppressed demand. By failing to provide sufficient work in the villages, the government has been encouraging seasonal migration.

Hence, there are two ways to repeal earlier injustices to some extent. Labour families who generally get their peak workdays during the summer months lost out on that opportunity this year due to the lockdown. So, they can be compensated by being paid for 20 days of work per household upfront, without any expectation of work in lieu of this payment. This is one effective way to transfer cash to needy families.

Also read: How India Can Improve Its Food Security After the Pandemic Passes

Secondly, the demand to increase the number of days per household from 100 to 200 days for this year has arisen. During natural calamities like drought and floods, the number of working days has been increased to 150 days per household. Another approach would be to let families work as much as they wanted to – even if the number of days exceeded 100 – as long as the state average of labour days per household did not cross 100.

This is with a minimalist approach.

Second is National Food Security Act administered through the Public Distribution System. There has been an announcement of higher quota, advance quota and some additional grains like one kilogram of pulses (which is yet to reach after 6 weeks of announcement). The present announcements have also mentioned the ongoing improvements in this program with the ‘One Nation One Ration card’ system.

A daily wage labourer holds a handout of naan, a traditional bread, and curry, which he has received from a distribution point of a charity during a lockdown, after Pakistan shut all markets, public places and discouraged large gatherings amid an outbreak of coronavirus disease (COVID-19), in Karachi, Pakistan, March 28, 2020. Photo: Reuters/Akhtar Soomro

Though this is not new, it is a work in progress, based on complete digitisation. It remains unclear whether a family with a ration card can split its quota across two places or shops. Additionally, the logistics of quota distribution need a lot of preparation. Some states where the need for food supplies is higher may not be able to comply with the digitisation, which will adversely impact the poor.

A major problem concerns those who have applied for ration cards but the application has been pending for several years with the department. Even after the program has been operational for decades and has been embedded in the Act for seven years, the apathy and inefficiencies in its functioning galore.

Who is to be held accountable if families who had applied have to wait for years for a ration card? Who is at fault if the procedure to change names on cards after people move or die is tedious and takes several visits? Such instances are not stray or exceptional occurrences – this is the reality seen by anyone working at the ground level.

For this year at the very least, there is an urgent need to compensate the poor, for the inefficiencies of the department processes, by giving them their due quota. The SECC survey, conducted in 2011, was to guide the allocation of government benefits. For all of rural India, there are only 11.2% of families who are in the ‘No Deprivation’ category. This means around 90% of the families should be given a ration card.

Third, is the Kisan Sanman Yojana. This is a mere Rs 6,000 per year and an additional Rs 2,000 is given during the present crisis. This does not even partially cover the agricultural expenses of a small farmer growing traditional crops dependent on rainfall. They work only after the kharif season and put aside the money for agricultural expenses. So their wage-earning outside of agriculture gets directly used in farming activity.

Also read: Centre Opts for Long-Term Agricultural Reforms, Leaving Farmers ‘Atmanirbhar’ in Crisis

This makes for a good reason to increase the amount to at least Rs 10,000 per year per farmer family. The amount also needs to reach all. The first two years have shown that a simple cash transfer has hurdles in reaching all the intended beneficiaries.

Fourth is crop insurance. It has now been made voluntary. This is likely to decrease the volume of farmers applying for it, which may become unviable to the insurance companies. There was potential to make appropriate changes to the scheme to ensure it benefitted farmers. Now the expectation is that small farmers, farming only during the kharif season, dependent on vagaries of nature, have to go looking for banks, customer service centres and banking correspondents to get their premium paid and upload their application.

This will not prove to be an easy task, after the rainfall starts, the electricity and internet connection is unreliable and for the farmer to make more than one visit is expensive. How do the central government and state governments plan to make it simpler and easier for the farmers here? Can the postman, who is now a bank correspondent as well, become a crop insurance agent?

Migrant workers are of different types, some leave their villages for weeks, come back and leave again and undertake this cyclical journey every six months or so. Some leave and return only after six or eight months. Some, who left a few years ago, started living in urban areas. Many migrant workers keep coming back during the kharif season to lend hand farming in their small plots. As per the Economic Survey of 2016-2017, for every five households, there is one household with at least one member who is a migrant.

Currently, most migrant workers desperately want to reach their homes and understandably so. The manner in which they have been abandoned in cities that they lived in has left them with a fear of returning to cities. With uncertainty about whether their accommodation in cities will be available to them upon their return, it is likely that many workers may not wish to go back to work in cities.

They may try to seek out work in and around their villages. While many may have acquired skills during their stay in cities, those particular set of skills may not be useful in rural areas.

Migrant workers cycle to their native places. Photo: PTI

The challenge then is to employ their proficiencies and skills which can be utilised to build roads, small warehouses, electricity networks, solar or other types of renewable energy plants, internet networks and other necessary infrastructures. They can repair or redesign schools, primary health centres and other government buildings. Working on these hitherto neglected infrastructure facilities can give a fillip to economic activities.

It is critical to understand one dimension of the migrant workers’ story. Most of them moved to cities in search of work, acquired skills by working as apprentices, struggled to find accommodation, formed slums and were harassed by authorities until their slums were regularised. They lived in cities with no proper houses, no water, no toilets, no electricity, no ration cards and so on.

What assistance did they get from any government? Housing for a very few. Urban services like water, electricity, public transport were always in short supply. Moreover, given the state of government hospitals and schools, they also put their children in private schools and went to private medical centres. The non-availability of basic services by the government has probably led to expenses to the tune of 40 to 50% of their earnings, which could have been saved and utilised during such times of crisis. Given such dire circumstances, isn’t it time the government supported them with cash transfers for at least six months?

Also read:The Urban Service Workforce Will Be the Next Casualty of the COVID-19 Lockdown

These efforts can help in reviving and restoring rural lives to some extent. This can help prevent families from slipping into poverty again.

To rebuild rural landscape, a new perspective is required. Think small. Bring back the watershed programs, bring programs to increase productivity of traditional crops like millets, oilseeds, pulses and encourage crops other than wheat and paddy. Bring back back-yard style animal husbandry, new programs for protective irrigation and focus on small and marginal, rainfed farmers growing traditional crops to get better returns for their land and labour.

As per the Agriculture Census 2011, 85% of farmers own less than 5 acres of farmland and 80% of the land is occupied in growing cereals, pulses and oilseeds. The agriculture budget needs to have a special set of programs for this category – small and marginal, rainfed, traditional crop-growing farmers which is the majority of farmers in India.

An unprecedented crisis is unfolding every day. This crisis may revert the human development milestones that India has attained so far and may again lead to the spectre of persistent poverty.

Ashwini Kulkarni is founder-trustee of Pragati Abhiyan, a Nashik-based NGO, and has been working on rural poverty and rural development for over thirty years.

Will Indian Agriculture Come out Relatively Unscathed in FY’21?

The outlook for kharif 2020 contains a few good signs, but much will depend on the monsoon.

Since the harvesting of most rabi crops was completed in time, despite the nationwide lockdown from March 24 onwards, an impression has gained ground that all is well with Indian agriculture.

It is true that due to extraordinary efforts made by government machinery, procurement of wheat in Punjab, Haryana and Madhya Pradesh has been more successful than expected. The smooth availability of agricultural produce, including fruits and vegetables, has also compounded the belief of India’s opinion making classes that not much is required to be done for agriculture.

As a matter of fact, some recent growth projections for the Indian economy assume that agriculture growth in FY’21 may not be significantly affected. For instance, former RBI governor C. Rangarajan and EY India’s chief policy adviser D.K. Srivastava reckon that this sector might show near-normal performance in 2020-21.

But this doesn’t represent the full picture of what has happened over the last two months.

Cotton farmers were facing low prices even before COVID-19 was taken seriously by the government. Rumours and misinformation have impacted the livelihood of poultry farmers, especially in northern states.

Farmers in Madhya Pradesh, India’s largest gram-producing state realised about Rs 700-800 less than the MSP of Rs 4,875 per quintal.

Also read: Centre Opts for Long-Term Agricultural Reforms, Leaving Farmers ‘Atmanirbhar’ in Crisis

Similarly, fruits and vegetable farmers across the country have suffered from a plunge in prices due bottlenecks in movement from villages to cities. Onion farmers in Nashik are barely able to recover their cost of cultivation. Milk producers, as Finance Minister Nirmala Sitharaman herself recently acknowledged in a press conference, have also greatly suffered.

According to a livelihoods survey carried out by the Azim Premji University, between April 13 and May 9, nearly 90% of the farmers were either not able to harvest or sell their produce or sold it at reduced prices during the lockdown.

Rest of the year

And what of the kharif crop this year? There are a few positive signs, but still much is uncertain.

On March 28, the home ministry allowed domestic production, import and movement of fertilisers to sale points. As a result, domestic availability was not adversely impacted even during the lockdown. It is significant that off-take of all three major fertilisers – urea, DAP and MOP – by farmers was about 36%, 72% and 43% higher in April 2020 than in the same month last year. Total sale of fertiliser (including complex fertilisers) in April 2020 was 19.14 lakh tonne against 12.82 lakh tonne in April, 2019, i.e. increase of about 49%.

Purchase of fertilisers by farmers could be due to the forecast of a good monsoon. In addition, it might be a behavioural response by the anxious farmers amidst a spectre of uncertainty. However, in previous years, the sale of fertilisers in April was only about 5-10% of sale in the entire kharif season (from April to September). So, the higher sale of fertilisers in April is no guarantee for a good kharif crop.

Also read: Amid Lockdown, UP Centres Procuring Grains From Fewer than 2 Farmers a Day on Average

The retail price of urea remains unchanged at Rs 266.50 per bag of 45 kg. Under the nutrient based subsidy scheme, the price of DAP has been reduced from Rs 1,400 to Rs. 1,200 per bag. However, the price of MOP stays at Rs 950 per bag.

According to a 2015 study by Dr Ramesh Chand and Pavithra S, use of potash is lower than the normative requirement in all states (except Assam). In Punjab and Haryana, deficiency is more than 70%. In kharif 2019-20, the share of Punjab and Haryana in consumption of urea was 9% and 5.54% whereas their share in the consumption of MOP was only 2.71% and 3% respectively.

It was an opportunity for the government to offer higher subsidy for potassic fertilisers to “nudge” farmers for more balanced use of the nutrients, particularly in large states with high K deficit. Another issue that merits further research is that neem coating of urea and its sale in smaller bags of 45 kg does not appear to have delivered the expected outcome of a significant decrease in the consumption of urea.

The availability of credit is a critical factor for purchase of inputs by farmers. As per NAFIS Report 2016-17, just about 30.5% of agricultural households borrowed from institutional sources. The rest borrowed from non-institutional sources, like non-banking financial institutions, moneylenders and landlords, often at a usurious rate of interest. There is a need to ensure that flow of credit for kharif is not hampered.

A farers harvests his what crop with the help of a brush cutter, in Palampur, Kangra district, May 15, 2020. Photo: PTI

The impact of lockdown on loan waivers is not known. If the process of loan waiver has not been completed in a state,  farmers would not be able to draw crop loans as their accounts would still be classified as a non-performing asset. For example, the loan waiver announced by the government after assembly elections has not been completed in Maharashtra.

The biggest problem in agriculturally-richer states would be the availability of labour. Transplantation of paddy in Punjab and Haryana was largely done by migrant labour. It is now almost certain that they will not be available for transplantation.

Punjab has announced a 40%-50% subsidy on machinery used for direct seeding of rice (DSR). Under this technique, seedlings are not raised in nursery and puddling, transplantation and submergence of fields in water are not required. The requirement of irrigation water is much less.

Under DSR, the rice is sown with tractor-operated lucky seed drill which sows rice and sprays herbicide. It is claimed that profitability of rice using the DSR technique is higher than rice transplanted in a puddle field. It is also claimed that less irrigation is required. The government has been promoting this technique for several years but it never really took off due to plentiful availability of labour.

There are also media reports of farmers in Punjab shifting from paddy to cotton. In 2019-20, cotton prices fell below the MSP and the procurement by Cotton Corporation of India was sluggish. Indian cotton prices are globally competitive. According to projections of the US department of agriculture (USDA), global consumption of cotton is projected to rebound by 11% and import of cotton by China is expected to increase by 20% over last year.

Also read: Interview |’Wait for Fine Print, But Centre’s Agri Reforms a Step in Right Direction’

If the DSR experience of paddy and shift to cotton is successful in Punjab and Haryana, the requirement of migrant labour may reduce in future years also, which will have unintended consequences of loss of income for labour coming from poor states of Bihar, Jharkhand and UP.

In the last 10 years, the paddy farmers in eastern India have started growing hybrid rice for which seed is available from private companies only. Since paddy is grown in rain-fed areas in these states, hybrid rice is preferred due to higher yield. Most processing units of hybrid seeds are around Hyderabad. Now that restrictions on movement, imposed in early phase of lockdown have eased, it can be expected that the companies will be able to place required quantities of hybrid seed in areas extending from eastern UP, Bihar, Jharkhand, Odisha and Chhattisgarh.

Soybean will face the most serious shortage of quality seed this year. This is due to damage to kharif crop in 2019 due to late rains in Maharashtra and Madhya Pradesh. Farmers will have to use their own farm-saved seed.  MP has asked for continuation of subsidy on a variety of soybean which is already 15 years old. This may reduce the productivity of soybean.

However, the most important determinant of kharif output is the distribution of monsoon in each month from June to September.

Forecasts of both IMD and Skymet went wrong in 2015-16, 2018-19 and 2019-20. Skymet has decided not to issue any forecast this year.

If IMD’s forecast of a near normal monsoon in 2020-21 proves to be correct, the kharif crop may save the day for GDP growth in India in a year for which rating agencies are predicting negative growth.

Siraj Hussain is Visiting Senior Fellow ICRIER. Jugal Mohapatra was Union Secretary, Fertiliser and Rural Development

Centre Opts for Long-Term Agricultural Reforms, Leaving Farmers ‘Atmanirbhar’ in Crisis

The government has failed to provide compensation and relief to farmers for the losses suffered during the lockdown, primarily because it lacks the fiscal space.

New Delhi: On Friday, finance minister Nirmala Sitharaman held her third press conference in as many days to follow up on Prime Minister Narendra Modi’s promise of a Rs 20 lakh crore financial stimulus package. After focussing on Micro, Small and Medium Enterprises (MSMEs), and migrant workers in the first two days, Sitharaman turned her attention to agriculture.

Sitharaman spent about fifteen minutes listing steps that the government had taken in the nearly two-month-long period of lockdown. These steps included the transfer of PM Kisan dues to nine crore farmers and payment of crop insurance claims to farmers – which had already been due and, in fact, delayed in the case of crop insurance claims.

The steps that Sitharaman subsequently announced included promises of three legal reforms to ease up agriculture marketing and the reinforcement of certain schemes that had been announced by the Centre in the past.

For instance, she announced that the government was launching the National Animal Disease Control Program which would ensure 100% vaccination of 53 crore animals and would involve spending Rs 13,000 crore. The same scheme had also been launched by PM Modi in September 2019 with an allocation Ra 12,600 crores.

Sitharaman also announced, as part of the COVID-19 relief package, existing schemes which have achieved varying degrees of success. She announced that the Operation Green launched in 2018 by the then finance minister Arun Jaitley would now be expanded to include fruits and vegetables. It was directed at easing the transport and storage of perishables and an allocation of Rs 500 crore was to be made for this – the same amount that was announced by Jaitley.

Also read: Amid Lockdown, UP Centres Procuring Grains From Fewer than 2 Farmers a Day on Average

The first actual approval of spending (not actual spending) under Operation Green came in February this year – two years after Jaitley’s announcement – when the Centre announced that it had approved projects where it would be spending Rs 162 crore for strengthening production clusters and farmer producer organisations. How much of this amount has been spent remains unknown.

The announcement to enhance the infrastructure for bee-keeping was also only a reiteration of the promise made in Sitharaman’s budget speech in February this year. Similarly, the Pradhan Mantri Matsya Sampada Yojana (PMMSY) to promote the development of marine and inland fisheries is also an existing scheme which was announced in July 2019 in the first budget after the NDA won a second consecutive term.

The government has now promised to spend Rs 20,000 crore under this scheme, which is a substantial increase from the Rs 3,700 crore that had been allocated at the time.

The Animal Husbandry Infrastructure Development Fund which Sitharaman has said will now be provided with Rs 15,000 crore through NABARD, is also an existing scheme which was set up in March 2018.

On the reform front, the government finally took the plunge and decided to roll out three key reforms which economists have long advocated for to ease the lock jams in the process of selling of produce and providing farmers with more avenues of sale.

These include relaxing the agriculture marketing rules, which Sitharaman promised would be done through a central law in due course and would enable farmers to make inter-state sales and enable e-trading of produce.

The finance minister also said that the government would amend the Essential Commodities Act of 1955. The Act, which was brought into effect during a time of scarcity, allows the government to control the price and quantity stored of any commodity listed as an essential.

Also read: Interview |’Wait for Fine Print, But Centre’s Agri Reforms a Step in Right Direction’

“What is happening is that farmers are producing. There is an abundance of crops, and this sometimes leads to issues because they would want to export, and we don’t permit that. Because of a flip-flop sometimes, farmers don’t get the benefit. Some other times, the consumers suffer. So there is a need to amend the Act,” Sitharaman said.

The government has now said that cereals, edible oils, oilseeds, pulses, onions and potato will be deregulated. It has also said that stock limits will only be imposed in “very exceptional circumstances like national calamities, famine with surge in prices.”

The third such reform announced by Sitharaman was that contract farming will be enabled and a legal framework will be devised to oversee the initiative. This would mean that farmers would be able to enter into contracts with buyers with assured sales price and quantities before the crop is sown providing them with an assured income.

Union finance minister Nirmala Sitharaman announcing the details of the government’s economic plan to fight the coronavirus pandemic, in New Delhi, May 13, 2020. Photo: PTI: Kamal Kishore

These steps have been advocated by agriculture economist Ashok Gulati for decades and he welcomed the steps. “What the government is doing with these reforms is it is creating alternative channels for farmers to sell their produce. So, they will have more choices,” he told The Wire in an interview. “I am happy that we are finally moving in the right direction. I congratulate the government for these steps.”

CPI(M)-affiliated All India Kisan Sabha, however, criticised the move. “Clearly, the move is to promote free trade under the slogan of one nation one market. The peasantry at large will be at the mercy of the Agri Business Corporations since there will not be any arrangements for price support and price stabilisation for crops. The Agriculture Produce Market Committees will be side-lined and the powers of the state governments will be eroded,” it said in a statement.

Politician and social scientist Yogendra Yadav, while agreeing that the reforms were necessary and overdue, was critical of the government for not focussing on the problems faced by farmers during the period of the lockdown and those that they would face in the next few months.

Also read: How Much Will Sitharaman’s Plan for Migrant Workers and Farmers Really Help?

“I honestly don’t understand what happened this afternoon. Was it a supplementary budget or a policy statement or were they just sent to occupy one hour of screen time and to manage headlines? What do any of the steps announced have to do with COVID and the lockdown? None of the steps will help the farmers in the next three or four months,” he said.

Yadav argued that the government ought to have compensated farmers for the losses suffered in the almost two-month-long lockdown and provided relief for the post lockdown period. A problem that the government and several commentators, including Gulati, have identified for this is that the government lacks the fiscal space.

“Why does the government lack the fiscal space? I will tell you why. Because it overestimated its revenues last year. Because it gave an ill-advised Rs 1.45 lakh crore tax break to corporates to deal with an economic downturn. This is why the government doesn’t have the money,” Yadav said.

Former Union agriculture secretary and visiting senior fellow at ICRIER Siraj Hussain said, while writing for MoneyControl, that the Centre’s announcements on Friday also signalled that it doesn’t view its ‘JAM trinity’ (Jan Dhan, Aadhar and mobile) as being capable of addressing the woes of the poor. “While the governance reforms of Essential commodities Act and agricultural marketing are good long-term measures, an important inference from three packages announced by the FM is that the Government does not see Jan Dhan, Aadhaar and Mobile trinity of much use to address the distress of the poor,” he wrote.

“The sad message for a vast majority of India’s poor is that: you are on your own,” he said.

COVID-19 Stimulus: Centre Announces Rs 1.63 Lakh-Crore Package for Agriculture and Allied Sectors

Mostly consisting of steps that will be completed over a longer horizon, Budget-like schemes for micro food enterprises, cattle vaccination, dairy sector, herbal plantation, beekeeping, and fruits and vegetables were also announced.

New Delhi: The Narendra Modi government on Friday unveiled the third tranche of its COVID-19 economic package, with announcements worth Rs 1.63 lakh crore for agriculture and allied sectors aimed at strengthening infrastructure, logistics and capacity building.

Like the last two installments, most of the proposals presented by Finance Minister Nirmala Sitharaman today were long-term measures that are unlikely to provide immediate relief caused by the national lockdown.

At a press conference, Sitharaman rolled out a Rs 1 lakh crore ‘Agri Infrastructure Fund’ that will finance projects at the farm-gate and aggregation point for efficient post-harvest management of crops.

She said the government will provide Rs 1 lakh crore for aggregators, farmers producers organisations (FPOs), primary agri cooperative societies, agri entrepreneurs and startups under this fund.

The fund will be created at the earliest, she said.

Besides this, schemes for micro food enterprises, cattle vaccination, dairy sector, herbal plantation, beekeeping, and fruits and vegetables were also announced.

Lack of adequate cold chain facilities and post-harvest management infrastructure in the vicinity of farm gates is causing gaps in the value chain, she said.

Also read: How Much Will Sitharaman’s Plan for Migrant Workers and Farmers Really Help?

Sitharaman also announced Rs 10,000 crore fund to support 2 lakh micro food enterprises (MFEs) for promoting health and wellness, herbal, organic and nutritional products.

The government will also launch a Rs 20,000 crore for fishermen through the Pradhan Mantri Matsya Sampada Yojana for the development of marine and inland fisheries.

Of this, Rs 11,000 crore will be earmarked for activities in marine, inland fisheries and aquaculture while Rs 9,000 crore for infrastructure creation such as fishing harbours, cold chain and markets.

This, she said, will provide employment to over 55 lakh persons and double exports to Rs 1 lakh crore.

Sitharaman also noted that the ongoing National Animal Disease Control Programme for Foot and Mouth Disease (FMD) and Brucellosis will look at 100 per cent vaccination of cattle, buffalo, sheep, goats, and pigs against FMD at an outlay of Rs 13,343 crore.

Also, a Rs 15,000 crore Animal Husbandry Infrastructure Development Fund was announced to support private investment in dairy processing, value addition and cattle feed infrastructure.

The government has launched a Rs 4,000 crore fund to promote herbal cultivation in about 10 lakh hectares of area, she said, adding that the scheme will help generate Rs 5,000 crore income for farmers. Along the bank of Ganga, a corridor of medicinal plants will be developed over 800 hectares area.

Another Rs 500 crore has been earmarked for beekeeping initiatives, helping 2 lakh beekeepers.

The government extended the ‘Operation Greens’ from tomato, onion and potato to all fruits and vegetables by providing an additional fund of Rs 500 crore. This money would go into providing subsidy on transportation from surplus to deficient markets as well as on storages including cold storages.

The scheme prevents any distress sale by farmers, she said.

New budget?

Political analyst Yogendra Yadav and other agriculture experts however said that Sitharaman’s press conference amounted to a new agricultural budget by the Centre and argued that it did too little to alleviate the suffering of small farmers right now.

(With inputs from PTI)

Unspent PM Kisan Funds May Be Used for MGNREGA: Report

While 7.17 crore farmers have been registered under PM Kisan, only 4.12 crore – those who registered in the first period – will be eligible to receive all four instalments that will be due by the end of March.

New Delhi: Some portion of the money that is likely to remain unspent under PM Kisan could be diverted for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), according to a report in Business Standard.

It is now likely that some of the Rs 20,000-Rs 25,000 crore that is expected to remain unspent under PM Kisan could be spent under MGNREGA which currently has an allocation of Rs 60,000 crore for the 2019-20 financial year and almost Rs 48,000 crore has already been spent.

The Wire had reported last week in a series of two reports that about 30% of the funds allocated for PM Kisan are likely to go unspent. An allocation of Rs 75,000 crore had been made for the 2019-20 financial year, but as on October 25, only Rs 26,000 crore had been spent.

The CEO of the scheme, Vivek Aggarwal, had told The Wire that not more than Rs 50,000 crore is likely to be spent till the end of the 2019-20 financial year.

Also read: Exclusive: Why Millions of Farmers Won’t Receive at Least One Instalment of PM Kisan

The reason, according to the ministry, is that in the beginning they had overestimated the number of farmers in the country. However, as The Wire had explained, it would be more accurate to say that the ministry did not – and still does not – know how many farmers there are in India.

We also found that another major reason for being unable to spend the entire allocation is that the ministry has decided to not make retrospective payments. This has meant that if a farmer was registered in the third period, they would not receive the instalments due in the first and second periods.

Exclusive: 30% of PM Kisan Funding to Go Unspent as Centre Doesn’t Know How Many Farmers India Has

So, while 7.17 crore farmers have been registered under PM Kisan, only 4.12 crore – those who registered in the first period – will be eligible to receive all the four instalments that will be due by the end of March 2020.

One of the factors that has led to the slow rate of registration of farmers is that states have delayed providing data for farmers or not provided data at all like in the case of West Bengal.

Exclusive: Why Millions of Farmers Won’t Receive at Least One Instalment of PM Kisan

Bureaucratic inefficiencies, delays at the state level and a slow pace of implementation is robbing millions of farmers of money the government promised they would get.

This is the second article in a two-part series on PM Kisan. Read the first part here.

New Delhi: Only 4.12 crore farmer families in the country are eligible to receive all the four instalments that will be due by the end of March 2020 under PM Kisan, according to information provided by the CEO of the scheme, Vivek Aggarwal.

This is because the Ministry of Agriculture and Farmers’ Welfare has decided to not make payments with retrospective effect. So only those farmers – numbering 4.12 crore – who had been registered in the first time period will be eligible to receive all four instalments.

Watch | Jaunpur: Rs 2,000 of PM Kisan Fund Deducted From Thousands of Accounts

Even though 4.12 crore farmer families received the first instalment under PM Kisan in the first time period, using some creative accounting – as we will explain in this article – the PM Kisan database available on the internet lists 7.17 crore farmer families as having received the first instalment.

As per the original estimate of the Centre, 12.5 crore small and marginal farmers were to receive the benefit of the scheme in which three instalments of Rs 2,000 each are to be paid to eligible farmer families in one financial year. That number was revised to 14.5 crore farmers when the scheme was extended to all farmers after the National Democratic Alliance returned for a second term in May this year.

Apart from the fact that the government did not have a database of farmers in India at the time the scheme was launched, another reason provided by the CEO of PM Kisan Vivek Aggarwal for being unable to spend the entire Rs 75,000 crore allocation is that state governments have delayed providing data on farmers in their states or not provided any data at all like in the case of West Bengal.

This has meant that even those farmers who are eligible to benefit from PM Kisan as per the definition of ‘farmer family’ for the purpose of the scheme have not received at least one instalment of the three that are due to them this financial year.

Also read: Under PM Kisan Scheme, Why is Money Credited Into Some Farmers’ Accounts Quickly Deducted?

Let’s try and break it down to understand this better. By March 31, 2020, all farmer families in the country should receive four instalments of Rs 2,000 if the scheme is implemented perfectly.

The first instalment pertains to the 2018-19 financial year, as the scheme was implemented retrospectively to ensure that the first tranche could be paid before May 2019 when the Lok Sabha elections began.

The period for which this payment was to be made was December 2018 to March 2019. That was, thus, the first period of the PM Kisan scheme.

The second period began in April and ended in July 2019. The third period is from August to November 2019, and the fourth will be December 2019 to March 2020.

Ideally, all farmer families should have received the first instalment in the first period, the second instalment in the second period, and so on. But that has not happened.

In the first period, a total 4.12 crore farmers – or 28% of the original estimate – received Rs 2,000 as income transfer under PM Kisan according to information provided by Aggarwal. As per the PM Kisan database available on the internet, the number of farmers who have received the first instalment is much higher, at 7.17 crore, as of October 30.

The difference is a result of some creative accounting deployed by the Ministry of Agriculture and Farmers’ Welfare to maintain the database that is made available on the internet. As Aggarwal explained to us, a farmer is listed as having received the first instalment even if the instalment is received in the second period or in the third period.

So, for instance, if a farmer was registered under PM Kisan in May 2019, i.e., in the second period, she will receive her first instalment in the second period, her second instalment in the third period and so on.

She would be listed as having received the first instalment even when she is not eligible to receive the Rs 2,000 due for the first time period as the ministry has decided that payment will not be made with retrospective effect.

Also read: Ground Report: What Farmers Had to Say About Modi Govt’s Income Support Scheme

This practice has led to an inflated figure of 7.17 crore farmers who have received the first instalment as per the PM Kisan database available online, when only 4.12 crore farmers received the Rs 2,000 instalment in the first period, i.e., December 2018 to March 2019.

Now, if we assume that the number of farmer families in India is 14.5 crore, as was done when the scheme was launched (although, the number is around 26.5 crore based on the Census 2011 data and the ministry’s definition of farmers), and we know that 4.12 crore farmer families received the first instalment in the first period. Then, over 10 crore farmer families will not receive the benefit of the first period instalment as payments are not being made with retrospective effect.

This also means that only 4.12 crore farmers are entitled to receive all the four instalments of PM Kisan that are due till the end of March 2020. This is because the ministry will not be making retrospective payments implying that those who did not register in the first period will be ineligible to receive at least one instalment out of the four.

In effect, 3.05 crore farmers who have been registered under PM Kisan after the first period will not receive at least one instalment of Rs 2,000 this financial year.

Due to the manner in which the database is maintained, the Ministry of Agriculture and Farmers’ Welfare will encounter a peculiar situation when the fourth instalment pertaining to December 2019 to March 2020 is due.

As per the system followed by the ministry, only those farmer families who were registered in the first period, i.e., December 2018 to March 2019, will be eligible to receive the fourth instalment in the fourth period as the ministry has decided to not make payments with retrospective effect.

So, only the 4.12 crore who were registered in the first period will be due their fourth instalment in the fourth period. For the others, who were registered in later periods, the fourth instalment will not be due until next year.

Also read: Will the PM Kisan Scheme Impress India’s Farmers?

Now, more than 4.12 crore farmer families are likely to receive a Rs 2,000 instalment in the fourth period as the farmers registered after the first period will receive one instalment and more farmers are likely to be registered in the fourth period. But not more than 4.12 crore farmer families can be listed as having received the fourth instalment by the end of March 2020 if the method currently deployed continues to be followed.

The pace of implementation of PM Kisan has also slowed since the May 2019 Lok Sabha elections as only 2.57 crore farmers were registered in the second period (April 2019 to July 2019), compared with 4.12 crore farmers who were registered in the first period (December 2018 to March 2019).

Since then the pace has been even slower, with only 39 lakh farmers having been registered in the third period (August to November 2019) as on October 25, 2019. With only a month to go before the window of the third period closes, it is unlikely that the number will exceed the number of farmers registered in the first period prior to the Lok Sabha elections.

So in all, only 7.17 crore farmer families have been registered and transferred at least one instalment of Rs 2,000 under PM Kisan in the almost nine months since the scheme was launched in February.

Vivek Aggarwal, the CEO of the scheme, is of the view that finally the number of beneficiaries who will be registered under PM Kisan will be around 10 crore, significantly lower than the 14.5 crore initially estimated.

If this guesstimate is correct, then a budgetary allocation of Rs 60,000 crore will be sufficient to provide all the three instalments to all the 10 crore farmer families as per the definition under PM Kisan. This is significantly lower than the Rs 75,000 crore allocated for the 2019-20 financial year, and the Rs 87,000 crore which was estimated to be required when the scheme was extended to all farmers.

“The data for number of farmers that we are getting is less than the original estimate. When the number of eligible farmers is lower, the total expenditure will also be lower,” said Aggarwal. “The original estimate was not based on farmers but on landholdings. We can’t transfer money on the basis of landholdings.”

Finally, it seems that the PM Kisan scheme will fall well short of achieving its objective of providing income support to all farmers in the country. The target of doubling farmers’ income by 2022 looks all the more daunting given the underwhelming performance of one of the key policy interventions of the Modi government.

Exclusive: 30% of PM Kisan Funding to Go Unspent as Centre Doesn’t Know How Many Farmers India Has

The agriculture ministry’s initial estimate of 14.5 crore ‘farmer families’ may come down to about 10 crore.

This is the first article in a two-part series on the PM Kisan scheme.

New Delhi: The government will be unable to spend a large chunk of the Rs 75,000 crore allocated to be spent under PM Kisan Samman Nidhi in the 2019-20 financial year, according to agriculture ministry joint secretary Vivek Aggarwal.

In an interview with The Wire, Aggarwal, who also is the CEO of PM Kisan, said that the actual spending under the programme is likely to be Rs 50,000 crore in 2019-20, implying that approximately Rs 25,000 crore, or 33% of the original allocation, will remain unutilised.

Aggarwal gives two reasons for this. Firstly, the number of farmer families in India might actually be less than the 14.5 crore that was initially estimated. Secondly, certain state governments have delayed providing – or not provided, as in the case of West Bengal – data pertaining to farmers in their respective states.

The key issue here is that when PM Kisan was launched, the government did not have a database of farmers in the country, a sign that the programme was perhaps pushed out quickly to quell farmer anger before the 2019 Lok Sabha elections.

Watch | Jaunpur: Rs 2,000 of PM Kisan Fund Deducted From Thousands of Accounts

The scheme was launched in February 2019, a few months before the Narendra Modi-led National Democratic Alliance government at the Centre was up for re-election, when interim finance minister Piyush Goyal announced that the government of India will be providing small and marginal farmer families with Rs 6,000 per annum as a direct transfer in three equal instalments.

After being re-elected in the Lok Sabha elections, the government announced that the scheme would no longer be restricted to small and marginal farmers and would be extended to all farmers in the country.

The scheme was to cost the exchequer Rs 75,000 crore for the 2019-20 financial year. An allocation of Rs 20,000 crore was made retrospectively for the 2018-19 financial year in order to provide the first instalment of the scheme for the period December 2018 to March 2019. Only Rs 8,000 crore of that 2018-19 allocation was spent according to a report in the Financial Express.

Considerations were also made to increase the allocation for 2019-20 by Rs 12,000 crore as initially the amount was budgeted keeping in mind that the transfer will be made to 12.5 crore small and marginal farmers. But with the post-election announcement that all farmer families – estimated to be Rs 14.5 crore – will benefit, more money would have to be allocated.

That, however, has not happened and will not happen, based on the information provided by the PM Kisan CEO. In fact so far, only Rs 26,000 crore, or 34% of this year’s allocation, has been spent. Aggarwal is of the view that the Rs 75,000 crore initially allocated cannot be spent fully this financial year.

“See, when we reach the 100% level of implementation then we will be utilising the entire Rs 75,000 crore each year. But, that will not be possible this year. It is likely that we touch Rs 50,000 crore. But, eventually it will happen. Next year we may touch Rs 70,000 or Rs 60,000 crore. But, this year it will be slightly less than that,” Aggarwal told The Wire.

Also read: Under PM Kisan Scheme, Why is Money Credited Into Some Farmers’ Accounts Quickly Deducted?

One of the reasons, according to Aggarwal, is that the number of farmer families in the country might be less than the 14.5 crore originally estimated.

Critics, like political analyst and politician Yogendra Yadav, agree that this is a problem.

“I think one of the key issues with PM Kisan is that the government does not know how many farmers there are in the country. When the scheme was announced they did not have a system of implementing it. It was only announced to quell farmers’ anger and benefit in the elections,” said Yadav.

Yadav is right when he says that the government does not have a database of all farmers in the country and Aggarwal accepts this.

The ministry of agriculture and farmers’ welfare is hoping that the PM Kisan exercise will also provide it with that much needed database.

The original estimate of number of farmer families in the country was based on the agriculture census of 2015-16, which pegged the number of operational landholdings in the country at 14.65 crore.

Also read: Ground Report: What Farmers Had to Say About Modi Govt’s Income Support Scheme

That number, however, was never going to be an accurate figure because operational landholdings in the country need not be the same as the number of farmer families in the country.

For instance, two landholdings being cultivated by the same ‘farmer family’ will be recorded as two landholdings in the agriculture census but count as one ‘farmer family’ for the purposes of PM Kisan.

On the other hand, one landholding being cultivated by two farmer families will be counted as one landholding for the agriculture census, but two farmer families will receive the benefit of PM Kisan – provided both parties have part ownership over the piece of the land.

The impact of the second scenario can already be seen in the case of Punjab where the number of landholdings as per the agriculture census were 10.93 lakh, but the PM Kisan database lists 17.52 lakh beneficiaries in the state as on October 23, 2019.

The ministry of agriculture and farmers’ welfare is of the view that this is because there tend to be multiple owners of one piece of land in the case of Punjab.

Also read: Will the PM Kisan Scheme Impress India’s Farmers?

Since the exercise of registering farmers under PM Kisan is still on, it is too soon to say that whether on a national level the number of farmer families eligible to benefit will be lower than the 14.5 crore originally or higher. Technically, it could be either.

But, the sense at the ministry of agriculture and farmers’ welfare is that the number would be lower. “Now, some states – like the southern states – are saying that they don’t have any more farmer data. That means that our original estimate of 14.5 crore may come to down to say about 10 crore,” said Aggarwal.

This guesstimate is lower than the 11.87 crore figure for number of cultivators provided by the Census of 2011.

Varied terminology

Another reason for the difference in numbers is the different definitions used by the agriculture census and PM Kisan.

Operational landholdings are defined by the ministry of statistics and program implementation as a piece of land which is being used for agriculture and it does not consider the legal status or title of the land.

On the other hand, under PM Kisan a farmer family is defined as a family comprising husband, wife and minor children who own cultivable land as per the land records of the state or union territory concerned.

A farmer removes dried plants from his parched paddy field on the outskirts of Ahmedabad. Credit: Reuters/Amit Dave/Files

The definitions, thus, are slightly different. The agriculture census focuses on land used for cultivation without regard for the title of the piece of land in question. Under PM Kisan, the spotlight is on a peasant family with a clear legal title on the land.

That would exclude, from receiving the benefit of PM Kisan, all those who cultivate land without title to it. So, a large number of those who are farmers will not receive the benefit of PM Kisan.

According to the ministry’s national policy for farmers, a farmer is defined as ‘a person actively engaged in the economic and/or livelihood activity of growing crops and producing other primary agricultural commodities’.

Also read: Exclusive: Agricultural Loans Worth Rs 59,000 Crore Went to 615 Accounts in One Year

The key here is that a farmer who does not own land is still described as a farmer as per the ministry’s own policy. PM Kisan – and kisan literally means farmer – is a scheme which was announced with the intention of providing an income support to farmers. But, in effect, farmers who don’t own land are excluded.

The number is not small either. According to the Census of 2011, the number of agricultural labourers – those who work on the land of others for wages – in India is 14.43 crore.

As per the ministry of agriculture and farmers’ welfare definition in the national policy, these agricultural labourers would be categorised as farmers.

The number of cultivators, at 11.87 crore, ought to be added to the number of agricultural labourers to arrive at the total number of farmers in the country. The number of farmers in the country would thus be 26.3 crore according to Census data and the ministry’s definition of farmers.

So, the PM Kisan scheme itself is not designed to benefit each farmer household in the country as the definition excludes those who do not have legal title to the land they cultivate.

Under PM Kisan Scheme, Why is Money Credited Into Some Farmers’ Accounts Quickly Deducted?

Documents obtained through RTI requests shed more light on complaints by farmers that money deposited under the PM Kisan scheme was immediately debited by the banks.

New Delhi: A right to information (RTI) query filed by The Wire has revealed that crores of rupees credited into farmers’ accounts under the Modi government’s ambitious PM Kisan Samman Nidhi (PM-Kisan) scheme were reversed within a few hours.

The BJP has been championing the PM-Kisan Yojana as a major accomplishment in its rallies for the ongoing Lok Sabha elections. Launched on February 24, PM Modi described the scheme as a significant step towards improving the condition of farmers.

However, documents accessed by The Wire reveal that the deposits of Rs 2,000 – given to thousands of farmers in the form of the first instalment – were reversed within a few hours, or a few days in some cases. The scheme provides Rs 6,000 annually, in three instalments of Rs 2,000, to farmers who own land totalling two hectares or less.

In response to the RTI query, of the 19 national banks in the country, the State Bank of India, Bank of Maharashtra, UCO Bank, Syndicate Bank, and Canara Bank admitted that for a number of beneficiaries, the money credited in the farmers’ accounts under the PM-Kisan Yojana has since been debited.

Banks claim ignorance about debited funds

The State Bank of India (SBI), India’s largest bank, said that there were 27,307 such accounts till March 8, 2019, and a total of Rs 5.46 crore had been deposited and then reversed. The SBI also said that it had credited Rs 854.85 crore in about 42,74,000 accounts till March 8, 2019, under the PM-Kisan scheme.

Similarly, the Bank of Maharashtra confirmed that some of the money deposited in the farmers’ accounts under the scheme has been deducted. The bank said that it had deposited around Rs 37.70 crore in 1,88,000 accounts so far of which Rs 61.2 lakh has been reversed.

Also read: Ground Report: What Farmers Had to Say About Modi Govt’s Income Support Scheme

According to this response, the money deposited under the PM’s farmer scheme has been debited by the Bank of Maharashtra from nearly 3,060 farmers’ accounts.

Meanwhile, the UCO Bank, in response to the RTI query, said that by February 24, Rs 58.38 lakh was debited from 2,919 accounts. The assistant general manager of the bank, A.K. Barua, said that the payment was reversed due to incorrect account numbers of the beneficiaries or other issues regarding Aadhaar cards.

Credit: Pixabay

Credit: Pixabay

However, upon further inquiries by The Wire about whether the account number of the beneficiaries was later corrected and payments processed again, the bank did not respond. According to data, the UCO bank had deposited Rs 30.28 crore in 1,51,000 accounts under the PM-Kisan scheme till February 24.

Another national bank, Syndicate Bank, responded to the RTI query by saying that since it needed to collect the information from different branches across the country, the information cannot be given under Section 7 (9).

In response to the RTI, Andhra Bank claimed that it had deposited around Rs 170 crore in nearly 8,54,000 accounts. Of this, Rs 90,50,02,178 had been “withdrawn”. When The Wire sought clarification, the bank’s general manager M. Satyanarayan Reddy claimed that the debited amount – which is more than Rs 90 crore – had been withdrawn by farmers.

However, he was unable to explain how the bank determined whether the withdrawal of Rs 2,000 from an account had been made from the amount deposited under the PM-Kisan scheme instead of a regular withdrawal by the account holder from his or her own savings.

Another nationalised bank, Canara Bank, has acknowledged the fact that several such cases have surfaced where the money deposited under PM-Kisan scheme was debited. However, the bank failed to provide information about the total number of such cases.

Also read: Will the PM Kisan Scheme Impress India’s Farmers?

While Canara Bank has maintained that the payment was reversed because the farmers’ account numbers were incorrect, several cases have come to light where the money had been withdrawn from accounts of eligible beneficiary farmers. But the bank gave no explanation in this context. The bank claimed that a total of Rs 1,43,77,84,000 was deposited in around 7,18,892 accounts till March 20 under the PM-Kisan scheme.

Funds mysteriously deducted from farmers’ accounts

Despite an enormous number of cases of withdrawal of funds deposited under the PM-Kisan scheme, the Union agriculture ministry claims to have no knowledge of it. The Farmers’ Welfare Department of the agriculture ministry said, in response to an RTI query, that the state government is responsible for reporting such cases and that no such information has been received by the department so far.

The ministry said that Rs 60,05,48,58,000 had been deposited in the accounts of nearly 3,00,27,429 farmers as the first instalment under the PM-Kisan scheme between December 2018 and 31 March 31.

During the month of February, several media reports claimed that farmers had complained about the fact that Rs 2,000 deposited in their accounts was reversed within a few hours or days.

A farmer removes dried plants from his parched paddy field on the outskirts of Ahmedabad, September 8, 2015. Credit: Reuters/Amit Dave/Files

Mirror Now spoke to farmers in Maharashtra who showed the messages they had received on their phones and alleged that the money was withdrawn from their account without their knowledge.

Ashok Lahamage, a Maharashtra farmer, told the Hindu BusinessLine that he had received an SMS from the State Bank of India’s Sinnar (Nashik) branch, stating that Rs 2,000 had been deposited into his account. But, to his surprise, he received another text message from the bank, a few hours later, stating that the money deposited had been debited.

The news portal wrote that he was not the only farmer in Maharashtra with this complaint. Over 1,000 farmers in Nanded district in the Marathwada region of the state were shocked when they came to know that the money deposited in their accounts was withdrawn.

Also read: Exclusive: Agricultural Loans Worth Rs 59,000 Crore Went to 615 Accounts in One Year

The National Herald also reported several such cases from the Jaunpur district in Uttar Pradesh where the money deposited in farmers’ accounts was deducted a few hours later.

Ramashankar Sharma, a resident of Baripar, said that there was a sigh of relief in his family as soon as they got a message saying that Rs 2,000 had been credited into their account.

But when he went to his bank (Union Bank of India) to update the passbook, he discovered that the credited amount had been debited back a few minutes later. Sharma has less than 0.3 acres of land. He runs a barbershop alongside to support his family.

Shamnath Pandey, who owns 1.5 acres of land in Jaunpur district, too had a similar experience. When the first instalment of Rs 2,000 was taken back, Shamnath went to the District Agricultural Officer but wasn’t given a satisfactory answer.

The Wire has e-mailed a list of questions to the CEO of the PM-Kisan scheme and the joint secretary of the ministry of agriculture. But no response has been received yet.

Responses have also been sought from several banks including the SBI and the Canara Bank. But they have not responded either.

The story will be updated if and when a response is received.

Translated from the Hindi original by Naushin Rehman.