Farmers’ average income grew 1.3-1.7x between FY18 and FY22, says SBI study

As the government grapples to meet its stated goal of doubling farmers’ income by 2022-23, a study by India’s largest bank, SBI, shows that between financial year 2017-18 and 2021-22, the average income of farmers rose by 1.3 -1.7 times across India, while in some crops like soybean in Maharashtra and cotton in Karnataka, incomes have in fact doubled during the same time.

The study, which comes barely days after the Centre showcased success stories of farmers who have managed to double their incomes during the past few years, also said that the increase in income of farmers growing cash crops has been more than those growing non-cash crops between FY18 and FY22.

The SBI study is based on primary data of its agriculture portfolio across states, which contains granular data of various crops from agri-intensive branches and analyses the change in income of farmers over the past five years.

The SBI report added that income from allied and non-farm activities grew by a significant 1.4-1.8 times in line with the increase in farmers’ income during the same period.

The Ashok Dalwai Committee on Doubling Farmers’ income set up by the Central government in its 14-volume report released a few years ago, had said that to double income from both farm and non-farm sources, it would have to grow by 10.4 per cent between 2015-16 and 2022-23 (the terminal year) in real terms (inflation-adjusted) and not nominally.

It had estimated the average annual income of an agricultural household in 2015-16 at Rs 96,703, which was projected to grow to Rs 1,72,694 by 2022-23, that is the end of the current financial year.

The SBI report also strongly criticises farm loan waivers announced by various states and the Centre during the past few years, saying the write-offs have failed to bring respite to the intended subjects, sabotaged credit discipline in select geographies and made banks/FIs wary of further lending.

It said since 2014, of about 37 million eligible farmers, only around 50 per cent received the amount of loan waiver (till March 2022), though in some states over 90 per cent of farmers received the debt waiver amount.

The report also said that Minimum Support Price (MSP), increasingly aligned with market-linked pricing, has been pivotal in ensuring better prices to farmers.