- Issues related to direct and indirect farm subsidies and minimum support prices; Public Distribution System objectives, functioning, limitations, revamping; issues of buffer stocks and food security; Technology missions; economics of animal-rearing.
PM – KISAN scheme
What to study?
For Prelims: Key Features of the scheme.
For Mains: Significance, relevance and need for the scheme, concerns and challenges over its implementation, is it sufficient?
Context: Cabinet approves relaxation of Aadhaar seeding of data of the beneficiaries under Pradhan Mantri Kisan Samman Nidhi (PM-Kisan).
What’s the issue?
Under the scheme, funds were to be released on the basis of Aadhaar seeded database.
However, it has not been possible to get 100% Aadhaar seeding for release of funds as per the prescribed time schedule before release of instalments after 1st August, 2019.
About Pradhan Mantri Kisan Samman Nidhi:
- Under this programme, vulnerable landholding farmer families, having cultivable land upto 2 hectares, will be provided direct income support at the rate of Rs. 6,000 per year. This income support will be transferred directly into the bank accounts of beneficiary farmers, in three equal installments of Rs. 2,000 each.
- The complete expenditure of Rs 75000 crore for the scheme will borne by the Union Government in 2019-20.
What is a small and marginal landholder family?
It comprises of husband, wife and minor children up to 18 years of age, who collectively own cultivable land up to two hectares as per the land records of the concerned states.
Around 12 crore small and marginal farmer families are expected to benefit from this. It would not only provide assured supplemental income to the most vulnerable farmer families, but would also meet their emergent needs especially before the harvest season. It would pave the way for the farmers to earn and live a respectable living.
Similar programmes by states:
- Bhavantar Bhugtan Yojana in Madhya Pradeshwas sought to provide relief to farmers by providing the differential between MSPs and market prices.
- The Rythu Bandhu scheme of the Telangana provides ₹4,000 per acre for every season to all the farmers of the state. Similar initiatives have also be framed in Jharkhand and Odisha.
- Krushak Assistance for Livelihood and Income augmentation (KALIA) of Odisha is more complicated in design and implementation. It commits to give Rs 5,000 per SMF, twice a year, that is Rs 10,000 a year.
Benefits of direct cash transfers:
- Immediate impact on reducing hunger and rural poverty.
- Help households to overcome credit constraints and manage risk. This can increase productive investment, increase access to markets and stimulate local economies.
- Income support can be used to make a repayment or at least activate a bank account which can then receive a loan.
- Increase investment in agricultural inputs, including farm implements and livestock.
- Serve as an important complement to a broader rural development agenda, including a pro-poor growth strategy focusing on agriculture.
Challenges with cash transfers- criticisms:
- Cash transfers are not greatly superior in terms of leakages compared to other schemes of in-kind transfer such as the public distribution system (PDS).
- A targeted cash transfer scheme envisions the role of the state to only providing cash income to the poor. This kind of approach seeks to absolve the state of its responsibility in providing basic services such as health, education, nutrition and livelihood.
- Cash transfer scheme cannot be substituted for subsidies and other institutional support systems such as the National Food Security Act-powered public distribution system. In fact, such cash transfer schemes could be counterproductive and may lead to more distress.
- Cash transfer is neither a substitute for the structural reforms needed in agriculture, nor does it adequately compensate the farmer for the risks and uncertainty of crop cultivation.
- In the absence of proper tenancy records, it will benefit the absentee landlords.
- It is no substitute for the lack of investment in agriculture, which has declined at 2.3% per annum in real terms.