National Council of Applied Economic Research
Opinion: Sanjib Pohit
After the agitation on the Farm Bills one expected that the Budget would not include any more reform agenda. But this has happened and the allocation within the line item do not exhibit major changes.
However if one looks at the size of the pie for small and marginal farmers in the Budget it emerges that they have received a raw deal. Here’s why.
Farmers or agricultural households have four sources of income — from crop agriculture livestock non-farm business and wages and salaries. The Budget deals with the first two sources of income. The relative contribution of the first two sources of incomes — crop and livestock — varies according to the size of the landholdings and across States.
According to Report of the Committee on Doubling Farmers’ Income Volume II at the lower end of the spectrum of land size which constitute the small/marginal farmers livestock is an important source of farmers’ income. As land size increases its importance decreases. Since bulk of our farmers are small/marginal ones their interest should be of some importance to the policymakers.
At all-India level out of the ₹100 income of a small/marginal farmer ₹70 comes from crop agriculture and ₹30 comes from livestock. However in some of the States like Gujarat Haryana Goa and Jharkhand the income from livestock for small/marginal famers could be in the range of ₹50-60 out of the total income of ₹100. This shows that there is need for separate policy support for this sector.
Big challenge
The biggest challenge that the livestock sector is facing now is the government’s recent policies on protection of cattle and restrictions on its trade combined with vigilantism by self-appointed cow-protection groups. The cow owners now have little choice. Either they need to maintain the animals or find ways to surreptitiously get rid of them by abandoning them in forests or pushing them into city roads under the cover of darkness.
Both of these options imply that the small and marginal farmers are worse off as they would not be able to earn from selling off their old cattle to invest in new productive stock which may reduce their family’s nutritional intake in the form of milk. This problem is also faced by the dairies which need to be provided a solution to dispose of cattle that have reached the end of their productive life.
The net outcome would be that cow population in India would decline in the coming years. The latest Livestock Census data (2019) indicates that the cow population in Madhya Pradesh Uttar Pradesh and Maharashtra declined by six per cent between 2012 and 2019 with farmers preferring to keep buffaloes. There is a view in some circle that by-products (gobar cow-urine) from unproductive stocks have economic value to take care of the well-being of same. However this is possible only in an organised centre but not in isolation by farmers at their households.
The easy solution to this problem could have been a buyback policy for unproductive cow stock by the government. If the Finance Minister can make a provision for scrappage policy for polluted vehicles why not a policy along similar lines for buying back unproductive cow stock from small/marginal farmers? Sure it would benefit all farmers.
Presently the crop insurance benefits the farmers from income loss in the event of crop failure. However there is none like same for livestock sector. It is also important since we find that small/marginal farmers suffer significant income loss when mass culling of their stocks (poultry) become necessary due to disease like bird flu. Incidentally the recurrence of this type of disease has become quite frequent these days. Thus there is more so a need to have a similar policy for livestock insurance.
Of course a silver lining is that the Finance Minister has indicated that there will be increased focus on credit flows to animal husbandry dairy and fisheries. Hope the small/marginal farmer may benefit from this initiative.
The writer Sanjib Pohit is Professor at NCAER. Views are personal