Cash transfer in agriculture

Cash transfer in agriculture

 Introduction

The crisis in agriculture has worsen due to decline in farm produce prices.

Government are starting many new schemes of providing relief to the farmers

 Loan waivers and price support and cash transfers where done in many state it

Bhavantar  Bhugtan Yojana in Madhya Pradesh- to provide relief to farmers by providing the differential between MSP and market prices

 Rythu  Bandhu  scheme by Telangana  government-- provide 4000 crore per acre for every season to all the farmers of the state

 Kalia scheme by Orissa Government.  Kaliya does not provide income from on the basis of landholding but on the basis of households

 Under the Kalia scheme(Krushak Assistance for Livelihood and Income Augmentation- Kalia)  10,000 rupees per family per year is given screen also extends to sharecroppers and land agriculture special SC ST family

In  Jharkhand a scheme has been started where  5000 rupees per acre is to be given to  2.28 million farmers 

Pradhan Mantri Kisan Samman Nidhi-

•  It provides in Asia to Income support to the small and marginal farmers.

•  Under this program for land holding farmer families having cultivable land up to two hectares will be provided direct income support at the rate of Rupees 6000 per year

• The income will be transferred directly to bank accounts of the beneficiary  farmers 

•  It will also look after any  other  emergency needs  before the harvest season

Role of cash transfer

•  Cash transfer programs has become an important tool of social protection and poverty reduction

•  It has immediate impact on reducing hunger and rural poverty.

•  This can increase productive investment, increase access to market and  stimulate local economics

• They can help household to overcome credit constants and manage risk

•  Cash transfer programs helps how to make a  repayment  of existing loans  and make him eligible  for  getting further credit  from banks

•  It helps in in order broader rural development agenda promoting  proper growth strategy  via  agriculture

•  Cash transfer program indirectly helps in inclusive growth and gives a push to the local economy 

Why  cash transfer schemes will not solve  the crisis in agriculture

•  It is a demotivating   step as the farmer I will not focus on innovation in agriculture.  He  will always be depending on  on credit from the government for his agricultural activities

• It can be a popular model and can be  politically rewarding  but it is very unlikely to resolve the the crisis in agriculture

•  It is only a short term solution  and not the long term resolution

• Cash transfer do not guarantee any protection against natural calamity

• It only does partial compensation for the farmers, risks  and uncertainty always  prevails

•  There is also an issue of identifying the beneficiaries

•  Most often the share croppers and landless labourers do not come under the Ambit of the schemes

• Cash transfers schemes  should not be an alternative for lack of investment in agriculture

•  Ultimately it makes the farmers more vulnerable to both natural and unnatural, market and non market induces

• State government will Erode the fiscal capacity of the state s it has committed a large part of state revenues to   loan waivers

 Real issues in agriculture

•  price disparity

•   unpredictable weather conditions

•  lack of innovation in agriculture

•  lack of  infrastructure

• agriculture market centralisation

•  middlemen in selling agricultural produce

 Way Forward

•  Government should go for long term solution  instead of short term  ones.

•  Government should increase investment in  in bringing about innovation in agriculture

• Govt  should give assured procurement and marketing of all commodities  having MSP

•  Swaminathan committee recommendations should be implemented which  recommends farmers 2 fix the price of the own produce

•  Organic farming should be promoted

• Government should invest in agriculture and infrastructure

•  Agriculture Universities should be established

• Government should  focus on on enhancing  farmer loan replacement capacity

• Apart from these,  the government should also look into-  Crop Insurance,

 subsidised seeds and fertilizers, better irrigation facilities, renewable energy implications like biogas plants,  revival of ancient farming techniques

All  these steps if properly implemented can solve the the crisis of farmers  in agricultural sector