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Product Differentiation to Tackle Farm Distress
The political discourse on agriculture has focused on support to farmers, notwithstanding that what has most failed the Indian agriculture is markets for outputs. Without alternative marketing opportunities, no two tomatoes or potatoes are differentiated and any increase in supply lead to price collapse, which has been at the core of agrarian distresses in India.
The discourse on Indian agriculture has been dominated by farm distress leading to politics of competitive support offers. Several schemes have been pitched, such as the Pradhan Mantri Kisan Samman Nidhi, the Nyuntam Aay Yojana (NYAY), the Rythu Bandhu scheme of Telangana or the Krushak Assistance for Livelihood and Income Augmentation (KALIA) of Odisha. The unifying principle of these schemes is income or livelihood support for the farmers or poor households. Being formulated as income transfer, these schemes are in the spirit of a social safety net.
Social safety nets come in a variety of forms that function according to an objective (Hanlon et al 2010). Social protection programmes aim to address the underlying market failures that may have contributed to the persistent state of poverty. The belief is that addressing the market failures would help households move out of poverty. Looking at agriculture from the social safety net lens is perhaps the reason behind agriculture not being treated as an income generator, which, we argue, would itself have contributed to farm distress.
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