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Govt considers NAC-backed proposal to integrate small farmers with producer groups
Premium(Mint)
New Delhi: On Tuesday, the Sonia Gandhi-led National Advisory Council (NAC) wrote a letter to the Prime Minister’s Office suggesting that a scheme to integrate small and marginal farmers into so-called producers groups be launched from 1 April.
Mint learns that the government is seriously considering the scheme, which will help such farmers become part of the supply chain of Big Retail, and also provide the producers groups with start-up capital up to Rs10 lakh and collateral-free loans up to Rs25 lakh that will be provided by financial institutions and other incentives.
If the government adopts the scheme, it could well become the equivalent of the farm-loan waiver the United Progressive Alliance launched in 2007-08 that, along with the Mahatma Gandhi National Rural Employment Guarantee Act, was responsible for the Congress-led coalition returning to power with a facile victory in 2009.
If such a scheme is implemented, it will benefit between 90 million and 100 million small and marginal farmers—part of the Aam Aadmi, or common man, electoral base the Congress has adopted as its own. And, in some ways, it will also explain how Big Retail, the White Knight the UPA believes will help kickstart a moribund economy, fits into the big picture.
“It is certainly a ploy ahead of the general elections next year. While the farmer producer groups may not be widely advertised, it (the scheme) will certainly be included in the manifesto," Jai Mrug, a Mumbai based political analyst, said, adding that it would be interesting to see how the NAC, the guiding force behind the government’s more social-minded programmes, suggested middle men who currently dominate supply chains be dealt with.
“The question is how do you clean up the supply chain—institutional reforms or an NAC—developed pro-farmer policy or foreign direct investment in retail as the government tried to tell us four months back?".
Himanshu, an assistant professor at the Jawaharlal Nehru University and a Mint columnist, said formation of farmer producer groups could be the next populist programme of the government.
“They want to pump in cash into rural India and this is a new excuse. If they are really serious about the matter, they should pass the cooperative bill pending in the Parliament and control and empower cooperatives. Such benefits are always cornered by a few like in the farm loan waiver scheme," he said.
Not everyone is convinced the move to create farmer roducer groups is motivated by electoral compulsions.
Sudhir Panwar of Kisan Jagriti Manch, a farmers’ body, said the idea was originally contained in a draft paper during the preparation of the 11th five-year Plan (2007-12). “This will provide much-needed bargaining power to the small farmers if properly implemented. I do not think this is an election stunt of the government," he said.
The UPA has been buffeted by corruption controversies in its second term. It has also been criticised for its inability to combat inflation and revive economic momentum. Since September, the government has sought to change this perception by unveiling a series of progressive measures.
Meanwhile, it also seems to be peparing for the next general elections, and adopted Aadhar-number based direct cash transfers as one strand of its political platform. In a recent brainstorming exercise in Jaipur, the Congress also decided to specifically target women voters.
In its recommendations, NAC has also sought to bring “special focus" on women farmers. “It is recommended that the government should consider promoting demand-based farmer-producer organization (FPOs), with focus given on women farmer members, under the existing centrally sponsored schemes of Agriculture and Rural Development, by earmarking a proportion of the funds for the purpose," the note to the prime minister’s office said.
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