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Updated: May 13, 2019 07:48 IST

An expansion of the Narendra Modi government’s cash-transfer scheme for small and marginal farmers, PM-Kisan, to cover all agricultural households is likely to be the incumbent National Democratic Alliance (NDA) government’s key farm plank if it returns to power.

The Prime Minister’s Office had this month asked various department heads and secretaries to draw up a policy agenda for the next government’s first 100 days. The agriculture ministry proposed expanding the coverage of PM-Kisan as part of its proposals to be accomplished in the first 100 days of the next government, two officials with knowledge of the matter said. Universal coverage of PM-Kisan among farmers is also a key manifesto promise of the BJP. A presentation before the PMO is on schedule, one of the officials cited above said on condition of anonymity.

Results for the ongoing Lok Sabha elections are due on May 23. A new government is expected to take office soon after that.

The “headline objective” for the farm sector is to double farm incomes by 2022 on the base year of 2017, a goal set by the current government, the second official Towards that objective, proposals being considered are higher public investment in the sector, short-term crop loans at zero per cent interest, boosting exports and a national warehousing grid along national highways.

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PM-Kisan came in the wake of rural distress marked by negative returns to farmers over the past two years, setting off protests in many states. A range of crops, from soyabean to pulses, continued to sell below federally fixed minimum support prices (MSPs). The government sets MSPs, which are meant to act as a floor price to help avoid distress sales, for 23 farm commodities.

Under PM-Kisan, the government hands out Rs 6,000 a year to small and marginal in instalments of Rs 2,000 each. Benefits under the programme are given on the basis of household land holdings. Small and marginal farmers are defined as those who own up to two hectares of land.

The programme, first proposed in the 2019-20 Budget, was launched by Prime Minister Narendra Modi from Uttar Pradesh’s Gorakhpur on February 24.

Currently, the scheme is designed to cover 125 million farmers. The country has 140 million operational land holdings, which refers to the number of land parcels owned by total households. Of these, 120 million – or 86% -- are below two hectares, or those owned by small and marginal farmers.

“Farm production volatility has of course reduced. But price volatility continues to be the key issue. The government possibly has rightfully chosen some vulnerable sections for income support. But the next step in agriculture for the government should be to just step back and let farmers face the market,” said Manoj Kumar Panda, director of Delhi University’s Institute of Economic Growth. Panda said longterm solutions for India’s antiquated farm sector, on which nearly two-thirds of the population depend for a livelihood, depend on structural reforms.

According to calculations of economist Ashok Gulati of the think-tank ICRIER, contained in an April 2018 paper, a national level income transfer scheme to all farmers will cost “Rs 1.97 lakh crore under the assumption that all farmers get Rs 10,000/ha irrespective of what crops they are growing and whom they are selling.” This is only slightly more than the Rs 1.70 lakh crore that the country spends on its food subsidy bill.