Huge central subsidy on farm machinery; negligible impact on ground

40-50% of cost borne by the central government to encourage modern technology in agriculture; 80% for machinery hubs, but farmers hardly know

Policymakers on farming in India need to urgently take a leaf out of the successful PM housing scheme if the massive leakage or lack of implementation kills more farmers or drives them to protests.

In stark contrast to the newly built houses under the PM housing scheme (Pradhan Mantri Awas Yojana), even in the hinterlands of the country, the farm sector seems to be perennially on the ICU with unabated farmer suicides and unrest across the country.

A ground check almost across the country will reveal that along with schemes like MNREGA the massive real estate boom over the past two decades have only made farming more difficult and less profitable, if not loss-making, especially in the unirrigated small farm lands. This makes the ambitious “Doubling farm income by 2022” goal of the government look like a joke.

A long-highlighted requirement has been farm mechanization. Given the highly fragmented and varied farm land ownership in India, farm mechanization has remained a huge challenge. To tackle this the central government has taken a multi-pronged approach.

First, a centrally sponsored scheme “Sub-Mission on Agricultural Mechanization” (SMAM) is being implemented through the state governments since 2014-15. It aims to increase the reach of farm mechanization to small and marginal farmers and to the regions where availability of farm power is low.

Another major objective of the scheme is to promote “Custom Hiring Centres” (CHCs) to offset the adverse economies of scale arising due to small landholding and high cost of individual ownership, the Union Minister of Agriculture and Farmers Welfare, Narendra Singh Tomar, told the Parliament earlier this month.

Under SMAM, the central government has been providing financial assistance of 40-50% of cost to farmers for purchase of machines and equipment since 2014-15.

Financial assistance at 40% of the project cost is also provided to rural youth and farmers – as entrepreneur, cooperative societies of farmers, registered farmers societies, farmer producer organizations (FPOs) and Panchayats — for establishment of CHCs and Hi-tech hubs of high value agricultural machines.

Further, the central government provides a subsidy of 80% (95% in north-eastern states) of the cost for projects costing up to Rs.10 Lakhs to cooperative societies, registered farmer societies, FPOs and Panchayats for setting up village-level Farm Machinery Banks (FMBs).

Tomar said, “The Government of India supports and facilitates the State Governments through various centrally sponsored and central sector schemes to promote agriculture throughout the country and infusing modern technologies into the agriculture sector.”

So, why are such huge subsidies not reaching the real farmers? Forget tillers and harvesters, why don’t small farmers have access to water pumps even in 2022? Why are the rich farmers getting richer? How are they getting access to all the schemes despite meagre publicity?

The answers are obvious and a debate could lead to several rounds of “khela hobe” or year-long 5-star farmer protests across the country. However, the real solution lies in going through the relative success of the PM housing scheme (despite massive corruption) and inculcating the relevant methods – at both the centre and states. This has to be done before it is too late, and before a food crisis hits India.