Income Transfer Schemes for farmers

  • IASbaba
  • May 25, 2020
  • 0
UPSC Articles
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Topic: General Studies 2,3:

  • Indian Economy and issues relating to planning, mobilization, of resources 
  • Government policies and interventions for development in various sectors 

Income Transfer Schemes for farmers

Context: Chhattisgarh government has recently launched the Rajiv Gandhi Kisan Nyay Yojana (RGKNY), an income transfer scheme for farmers


  • It aims to supplement the income of the Chhattisgarh State’s 18 lakh rice, maize and sugarcane farmers through direct cash transfers
  • RGKNY provides 10,000/acre for paddy farmers and Rs 13,000/acre for sugarcane farmers.
  • The scheme will be extended to farmers of other crops — in fact, to landless labourers as well
  • This is in addition to the Centre’s PM-KISAN scheme that provides ₹6,000 to farm families owning less than five acres of land

Did You Know about similar income transfer schemes by State governments?

  • Telangana Rytha Bandu Scheme offers cash transfer scheme of Rs 5,000/acre, per season
  • Odisha government launched the KALIA scheme (Krushak Assistance for Livelihood and Income Augmentation) 
  • West Bengal has Krishak Bandhu scheme
  • Jharkhand has Mukhya Mantri Krishi Aashirwad Yojana 

What are the Challenges of income transfer scheme?

  1. Targeting the Real Beneficiary
    • Ideally, the money should go to the real tiller. But in large parts of the country, there is no record of tenancy.
    • The government data shows only 10% tenancy in the country while several micro-level studies indicate that it could be anywhere between 25-30%.
  1. Identification issues:
    • The other issue is identifying the landless labourers working on farms as majority of them are temporary and seasonal workers. 
    • This leaves the task of identification to panchayats which can open doors for large leakages and corruption
  1. Short-term solution
    • Income transfers are only palliative and cannot address the underlying problem, which is the non-remunerative nature of farming. 
    • Transfer of income can lead to conspicuous consumption diverting money away from productive investments

Why is there a low record of tenancy in India?

  • The current law, favouring “land to the tiller”, is loaded against the owner.
  • As a result, much of tenancy in the country remains oral.
  • Hence, there is a need to change the tenancy laws, and open up land lease markets, ensuring that the owner of the land has full rights to take his land back after the expiry of the lease period

Way Forward

  1. Information and persuasion campaigns: 
    • Fully inform the tiller that the owner has got income support and then appeal to the owner to pass on this benefit to the tiller or adjust the rent accordingly
    • This would increase the chances of the benefits being passed on to the real tillers — or at least help the tenants to bargain on the terms of tenancy.
  1. Creation of Umbrella Scheme by merging of Various Schemes: 
    • Merging income support schemes, including the PM KISAN and state-level schemes, with the MGNREGA and price-subsidy schemes (food & fertilizer) to start a basic income cover for poor households
    • This approach can cover landless labourers, farmers, and poor consumers 
  1. Structural Changes to Agriculture: This includes the following
    • Rectifying messy land records
    • Getting rid of unscientific and unsustainable crop patterns, 
    • Correcting market linkages that make the farmers vulnerable to exploitation by officials and middlemen
    • Ensuring adequate irrigation
    • Adoption of technology
    • Resolving conflict with wildlife, and 
    • Adapting agriculture to changing weather and climate patterns.

Connecting the dots:

  • Zero Budget Natural Farming
  • Cooperative Farming

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