IDEA behind Farmer Income Support is JAI TECHNOLOGY JAI KISAN

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  • The deeper intent behind farmer income support is to hasten the process of digitalization of land records and collection of farm data.
  • This articles gives eleven ideas on how data allows micro targeting of value services, financial and non-financial incentives.
                           

Yesterday Prime Minister Modi launched the direct cash benefit scheme for farmers. The scheme was announced in the interim budget on February 1. It provided income support of Rs 6,000/ p.a. to Small and Marginal farmers (SMFs). 

 

Post the interim budget analysts debated the impact on the fiscal deficit of the Rs 75,000 cr PM-KISAN scheme and wondered if Rs 6,000/ was too small an amount to make a difference. However, what has been being missed out is the BIG POSSIBILITIES that might emerge if the scheme succeeds.

 

But first a background note.

 

Successive central governments, including NDA 2, have been grappling with farm distress. None of them have explained that –

 

One, agriculture is essentially the responsibility of the state government with their role being mainly limited to declaration of MSP for wheat and rice-its procurement, deciding import export policy and quantum of agricultural credit/interest subsidy. Crop insurance, disaster relief, technology generation are largely managed by the Centre.

 It is for this reason that the power to levy income-tax on agriculture lies with the State governments.

Two, realizing limitations imposed by the constitution NDA 2 gave states a model agricultural produce and livestock marketing (APLM) law, 2017 that is intended to replace the existing APMC Act. And “a model agricultural land lease law, 2016. Not to forget a draft model contract farming law, 2018 to mitigate these problems by allowing absentee landowners to lease out land without fear of losing title.” 1

 

However, every attempt at structural reforms has been stonewalled by the States. For e.g. Maharashtra scrapped the APMC Act but reversed its decision in months.

 

At the same time digitization of land records in states has not taken off despite a ‘Digital India National Record Modernization Program’ that was funded by the Central government.

 

Nizam of Hyderabad Mir Osman Ali Khan ruled the state from 1911 until 1948

 

The idea of income support to farmers caught the national imagination after the success of the Rythu Bandhu in Telangana. Many attribute KC Rao’s re-election to this scheme.

 

A background note on the system of land revenue in pre-independent India would be appropriate

 

The Ryotwari system prevalent in most of South India (British administered areas) meant direct collection of land revenue from each individual cultivator by the government. So land had to be measured and its owner known.

 

Conversely, in Bengal, Bihar and Uttar Pradesh the Zamindari system was in vogue where the Zamindar was responsible for collecting rent from peasants and remit it to the State. Thus, the government did not have to maintain land records.

 

According to Dr Gautam Pingle, Dean of Studies & Head, Centre for Telangana Studies, MCR-HRD Institute of Telangana, “State’s share of produce was 1/6th of produce under Hindu rule. Since Telangana was under Muslim rule-Nizam rate was 50% for non-Muslims. Since large parts of Andhra Pradesh were under British rule rate was 25%. In Travancore State rate was 10% and Cochin zero. This required the State to maintain land records.”

 

In 1985 N T Rama Rao, as Chief Minister of undivided Andhra Pradesh, abolished land revenue so the need for updated land records was no longer required.

 

Subsequently Chandra Babu Naidu focused on digitization (excluding land records) and introduced CARD (computer aided registration department) around 1998. When KC Rao introduced a grant of Rs 8,000/ per acre farmers, rich and poor, rushed to have their land records updated post which barcoded passbooks were issued.
 

Karnataka started the Bhoomi project for computerization of land records way back in 2002. According to the HINDU the second phase of land document digitization started in October 2017. However, a scheme similar to Rythu Bandhu was not started.

 

Notwithstanding the above, pressure on the central government to resolve farm distress continues unabated. Instead of undertaking reforms state governments are quick to blame Delhi for farm distress. I call it Upward Delegation.

 

With this backdrop the Pradhan Mantri Kisan Samman Nidhi (PMKSN) was announced. The central government would, for the first time, single-handedly and directly fund income support to SMFs.

 

Farmer’s march in 2018

 

What are the broad contours of the scheme?

 

“Small and marginal farmer (SMF) families having combined landholding/ownership of up to two hectares, as per the land records of the States/UT, would receive support of Rs 6,000/ per annum. A family is defined as husband, wife and minor children. The existing land-ownership system will be used for identification of beneficiaries2

 

Having an Aadhaar for availing benefits is mandatory. Where a SMF does not have Aadhar or its Enrolment number alternate prescribed documents are stated. However, the alternate allows SMF to receive the first instalment of support.

 

“Responsibility of identifying the landholder farmer family eligible for benefit under the scheme shall be of the State/UT Government. The States shall prepare database of eligible beneficiary landholder farmer families in the villages capturing the Name, Age, Gender, Category (SC/ST), Aadhaar Number or equivalent, Bank Account Number, IFSC Code. Though mobile number is not mandatory but it is advised that when available it may be captured so that the information related to sanction/transfer of benefit can be communicated.” 2

Farmer has an option of sharing - “Father name, Address, Mobile Number, Date of Birth/Age, Farm-Size in Hectare, Survey Number, Khasra Number’. 2

 

State/UT need to link farmer details with Aadhaar and bank details of the beneficiaries. SMF data has to be uploaded by States/UT on PM Kisan Portal in a uniform structure. This Portal shall give location wise data of benefitted farmers list and monitor fund transaction details.

 

Whilst digitization of land records may not be possible before the first pay-out, the desire to receive income support would motivate farmers and state government to focus on digitization.  

 

Data collection and collation needs a phased approach.

 

In phase one the centre would have SMF name, aadhar and bank account numbers. It is assumed that farmers would, in their own interest, share mobile numbers if not part of the Aadhaar database already. This would enable the central and state governments to provide various advisory services to SMFs.

 

Once data collection under phase one has stabilised, the government should continue the income scheme but make a pre-condition that SMFs have to share farm-size, survey number, seed sowed and actual production.

 

The underlying idea behind this effort is information leads to data. Next data and analytics allow micro targeting of value services, financial and non-financial incentives.

 

How could this channel of communication and farm data be used for the farmer’s benefit?

 

The possibilities are enormous and would evolve with time. Here are some ideas.

 

One, SMFs want income support and government transparency so PMKSN would hasten the process of digitization of land records. I call this the bottom up approach. Once digitization is complete it would increase availability of credit through formal channels.

 

Two, state/district wise details of SMFs would enable better targeting of subsidy and advisory services support. 

 

Three, when a region is adversely affected by a natural calamity it would enable quick transfer of funds to SMFs in affected areas. 

 

Four, SMFs can receive advice for e.g. productivity, yields, fertilizer to use and what not to use. 

 

Five, SMFs  can receive real time information on trade and price, sell anywhere in India and receive payment online. The message could have appropriate links to the National Marketing Portal

 

Drip-irrigation needs to be promoted nationwide.

Six, a message can be sent to farmers enlightening them on the methodology and benefits of drip-water irrigation.

 

Seven, states that provide free power to farmers can, based on this data, provide free power only to SMFs. Free power has contributed to depleting water tables.

 

When SMFs, in phase two, share details of what is sowed and actual production, more benefits might accrue.

 

Eight, the government can, in case of an over-supply, advice farmers to grow a crop in short supply.

 

Nine, fertiliser consumption based on farm area can be compared with fertilizer off take as captured by the point of sale terminals. This would be another way to reduce pilferage of subsidised fertilisers.

 

Tenant farmers in Telangana are angry that benefits under the Rythu Bandhu scheme are denied to them. Solutions are two. Tenants reduce benefit amount from rent payable to land owner. OR make it mandatory for tenancy agreements to be registered online.

 

If the government is able to, in phase three, incentivise all farmers to provide details of sowing and actual production online additional benefits could accrue. 

 

Ten, this would enable quicker consolidation and probably a more accurate way of estimating actual agricultural production. 

 

Eleven, based on numbers collated under ten the government can advise farmers to adjust sowing of items in over or short supply. After all is not over-supply one of the reasons for farm distress. 

 

None should expect results of the above efforts in a hurry. This is a three-four year project that requires constant communication in Indian languages accompanied by close monitoring.

 

These are only some possibilities of how farm data, collected through PMKSN, can be used to smartly.    

 

Using data efficiently would increase farmer incomes, make SMFs part of a larger agricultural eco-system, become a vehicle for two way communication– farmer needs and advisory services, reduce pilferages and contribute to farmer happiness.

 

The last thing one should do is to underestimate the enormity of the task ahead. After all when the Jan Dhan Yojana scheme was announced sceptics wondered if it was possible. 34.26 cr accounts were opened as on 12.2.2019. PMKSN is possible because of accounts opened through JDY.

 

Let us look at the big picture, explore the unknown and harness technology for the benefit of India’s agricultural sector.

 

JAI TECHNOLOGY JAI KISAN

 

Author is an Independent Columnist, Chartered Accountant and founder www.esamskriti.com.

 

References

1 MINT editorial of 24/1/2018

2 PM-Kissan Samman Nidhi site

 

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2 How Punjab’s misplaced agricultural priorities contribute to Delhi’s pollution

3 Taxing agriculture selectively is an idea whose time has come

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