In July, two interesting things happened that can, to a large extent, help Indian farmers augment their incomes. First, the Union finance minister (FM), in her maiden budget speech, asked why annadata (farmer) cannot become urjadata (producer of solar power). Second, in the Parliament the Minister of State for agriculture, responding to a question on the prime minister’s promise of doubling farmers' income (DFI) by 2022, admitted that the existing set of policies cannot double farmers' real incomes by 2022. I welcome and appreciate this honesty, although the PM may still be optimistic to fulfil his dream of DFI by 2022. I have been saying, for the last two years through this newspaper column, that it is almost impossible to DFI by 2022 with the set of policies that the government has adopted; they will not achieve even half the target. The remaining 4 years till 2022-23 require the real incomes of farmers to go up by 13-15% per annum. But, as they say, nothing is impossible in this world, so here is my single suggestion to move in that direction.
But before that, let us quickly recapitulate the debate on this slogan of DFI given by the PM in February 2016 in Bareilly. The PM said it is his "dream" to DFI by 2022. It was followed by setting up a committee, headed by Ashok Dalwai, in April 2016. The committee clarified that it is real income that needs to be doubled over 7 years (over the base income of 2015-16), requiring a growth rate of 10.4% per year. The committee submitted its final report in September 2018. It comprises of 14 volumes (almost 3,000 pages) and 619 recommendations! These volumes contain a wealth of information, but I doubt any government can implement 619 recommendations even in five years. My humble submission to our friend Ashok Dalwai and his team is that they will do a great national service if they bring out a summary of 14 volumes in 20-25 pages, and prioritise just 5-10 recommendations from a laundry list of 619 recommendations.
But, let us get back to the FM's statement of why the annadata can't become the urjadata. This one policy has the potential to DFI within a year or two. How? Here are the details.
The PM has also set a target of producing 100 GW of solar power by 2022. He wants to be one of the frontrunners in International Solar Alliance for clean energy. So far, the model that has been adopted to develop solar power is inviting bids from large business players. And big players did enter, ranging from Mahindra and Mahindra to Adanis, and so on. Some of them who entered early into Power Purchase Agreements (PPA) with state governments had to burn their hands when the costs came down and the state governments forced them to revise the costs of PPA downwards, upsetting their economic calculations. But, this model of generating solar power was not very inclusive. The land has been locked for solar panels for almost 25 years, and the benefits go only to a few investors.
The alternative model is to help farmers produce solar power on their lands, making annadata an urjadata! After all, farmers occupy the largest chunk of land in this country. This model will be much more inclusive and can help augment their incomes significantly. There are two variants of this: (a) replace all pump sets, especially diesel ones, with solar pumps and the excess power generated through solar panels can be purchased by the state government at a price that gives farmers a good margin over their cost of producing solar power; (b) encourage farmers to grow "solar trees" on their lands, to the height of about 10-12 feet, in a manner that enough sunlight keeps coming to plants below. Under the second variant, farmers can keep growing two irrigated crops as they have been doing, but the solar trees generate a lot of excess power that can be purchased by the state government. The power generated under this variant is multiple times more than that produced under the first variant, and, therefore, the income augmentation can also be several times more.
At ICRIER, we did a global survey and found that it is being practiced in many countries, from Japan to China to Germany, and India is ripe for this. The problem is mobilising enough capital to install these solar trees. In one acre, you can have 500 solar trees in a such a manner that even tractors can move through them and farmers can keep growing their normal crops. It does not impact their productivity as there is ample sunlight coming from the sides for the crops to perform photosynthesis. The second precondition is that the state should be ready to sign the power purchase agreement.
The current LG of Delhi, Anil Baijal, got excited about this idea and wanted to implement it in Delhi's agri-belt as a demonstration plot. After several meetings with him and his team, the Delhi government actually announced a policy to that effect. As per their calculation, 500 trees can be planted per acre of farming land; the investment in solar panels (trees) will be done by other business persons.
The only thing that farmers have to assure is that for 25 years, they will not convert their land to other uses. The economic calculations suggested that farmers can be given `one lakh/acre per annum as net income, with 6% increase every year for the next 25 years! This can easily DFI overnight. They do not have to mobilise capital for solar panels since that is done by other businesses, who also make a profit in the process. Given that power consumption per hectare in Indian agriculture is still very low (see graph), this holds a great promise for several poorer states.
Can the Modi government unleash this revolution of solar power and double farmers' income?
(The writer is Infosys chair professor for agriculture, ICRIER. Views are personal)