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Business News/ Industry / Agriculture/  Climate change may reduce farm incomes by up to 25%: Economic Survey
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Climate change may reduce farm incomes by up to 25%: Economic Survey

Climate change could reduce annual agricultural incomes in the range of 15% to 18% on average, and up to 20% to 25% for unirrigated areas, according to the Economic Survey

An analysis in the Economic Survey found that in a year when rainfall levels were 100 mm below average, farmer incomes would fall by 15% during kharif (summer) and 7% during the rabi (winter) crop season. Photo: Indranil Bhoumik/MintPremium
An analysis in the Economic Survey found that in a year when rainfall levels were 100 mm below average, farmer incomes would fall by 15% during kharif (summer) and 7% during the rabi (winter) crop season. Photo: Indranil Bhoumik/Mint

New Delhi: Farm incomes in India may fall by up to 25% in unirrigated areas in the medium term as a result of climate change, the Economic Survey warned, while pointing out that agriculture gross domestic product (GDP) growth and farm revenues have stagnated in the past four years due to repeated monsoon failures.

The Economic Survey released on Monday praised the government’s goal of doubling farm incomes by 2022 and suggested radical follow-up action, including “efforts to bring science and technology to farmers, replacing untargeted subsidies (power and fertilizer) by direct income support, and dramatically extending irrigation but via efficient drip and sprinkler technologies".

An analysis in the Economic Survey found that during the years when rainfall levels drop 100 mm below average, farmer incomes would fall by 15% during kharif (summer) and 7% during the rabi (winter) crop seasons.

“Climate change could reduce annual agricultural incomes in the range of 15% to 18% on average, and up to 20% to 25% for unirrigated areas," the Survey said, adding, “at current levels of farm income, that translates into more than Rs3,600 per year for the median farm household."

However, the Survey also said that fully irrigating Indian agriculture—currently more than half of India’s crop area is rain-fed—will be a “defining challenge for the future".

“Against the backdrop of water scarcity and limited efficiency in existing irrigation schemes... technologies of drip irrigation, sprinklers and water management—captured in the ‘more crop for every drop’ campaign—may well hold the key to the future of Indian agriculture," it said.

On recent trends in the agriculture sector, the Economic Survey flagged the deceleration in rural wages beginning just ahead of the kharif crop season last year, lower planting of crops during 2017-18 which reduced demand for labour, and unusually low prices for farmers growing pulses and oilseeds.

Significant price fluctuation in perishables such as onions, potatoes and tomatoes have also contributed to income uncertainty for farmers, the Survey said.

“The past few seasons have witnessed a problem of plenty: farm revenues declining for a number of crops despite increasing production and market prices falling below the minimum support price (MSP)," the Survey said.

On future reforms in the agriculture sector, the Economic Survey said they need to be tailored by making a distinction between “two agricultures" in India.

In the input-intensive and irrigated cereal-growing areas in northern India, price support and input subsidies have to make way for “less damaging" direct benefit or cash transfers, while in the rain-dependent and low public procurement states in central, western and southern India, the focus needs to be on investing in research and technology for non-cereal crops, removing market barriers, improving post-harvest facilities, and developing a better livestock policy.

“The Economic Survey only analyses the climate risks faced by the farmers without spelling out in detail how this needs to be addressed," said Kiran Vissa, farm activist and national working group member of the All India Kisan Sangharsh Coordination Committee, a coalition of farmer organizations in India.

“The Survey leaves out critical aspects, only making passing references to falling crop prices and rising indebtedness among farmers," Vissa said, adding, “it admits that real revenue growth in agriculture which is a proxy for farmer incomes has remained stagnant in the past four years, but does not discuss how farmer incomes are going to be doubled (by 2022) in such a situation."

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ABOUT THE AUTHOR
Sayantan Bera
Sayantan is a National Writer with the Long Story team at Mint, covering food and nutrition, agriculture, and rural economy. His reportage is based on granular ground reports, tying it with broader macroeconomic realities, with a sharp focus on people and livelihoods. Beyond rural issues, Sayantan has written deep dives on topics spanning healthcare, gender, education, and science.
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Published: 29 Jan 2018, 03:46 PM IST
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