Doubling farm income needs fresh thinking - Centrum report

Rising food inflation remains a cause of worry and a drop in the procurement of grains by the government in May remains a key concern for farmers, according to a Centrum Broking report.

The broader worry, however, remains on ignoring declining farmers’ income and initiatives in incentivizing them to produce more to avoid a situation where India needs to import food grains from outside as was seen earlier in 2007 and 2016.

"FMCG industry deliver strong growth only when the poor people have more money in their hand to spend. When this happens, as a result, the demand becomes huge and the economics of the company does not need any kind of boosters," said Centrum after discussions with Devinder Sharma, a trained agriculture scientist.


The government has taken various initiatives such as providing subsidies in fertilizers, deciding minimum support prices (MSPs) for crops (reviewing before every season) and E‐Nam procurement benefits, yet the farmers in the country are facing severe distress.

Sharma suggested a few recommendations - more focus on farm mechanization, price assurance to further increase production, and assured income in the hands of farmers which in turn may benefit the economy by large.

"The country’s supply chain is production push driven. There are multiple startups working in the right spirit to enable farmers with crop education and monitoring. The change in the mindset has to be brought to the secondary side of the supply chain where the market has to be pushed to be more demand-driven," said Udit Sangwan, co-founder, Agrigator, an agricultural supply chain platform. "This will bridge the information gap and give better visibility on consumer expectations resulting in better planning of crops at the farmer's end and in turn giving better returns."

According to the report, improving agriculture contribution and output could become a growth engine for the Indian economy if the entire ecosystem is thought afresh as traditional systems have had a limited role in doubling farmer income.