Farmers across the country were eagerly anticipating an increase in the PM Kisan Sanman Nidhi scheme as part of the budget for the fiscal year 2023-24. However, their hopes were dashed as the long-awaited adjustment failed to materialize. The main factor contributing to this expectation was the relentless surge in energy inflation, particularly the exorbitant rise in diesel prices.

Launched in February 2019, the PM Kisan Sanman Nidhi scheme aims to provide financial support to small and marginal farmers by granting them direct income transfers of Rs. 6,000 per year. In February 2019, diesel prices in Mumbai stood at Rs. 68.81 per liter. Presently, the price has soared to an alarming Rs. 94.27 per liter, marking an increase of Rs. 25 per liter within this period alone.

According to a study sponsored by the ministry of agriculture and conducted by the Institute of Economic Growth in New Delhi, the average amount of diesel used for irrigation was 117.5 litres per hectare for rice. With the average landholding in India being 1.08 hectares, a paddy crop requires approximately 125 liters of diesel per cycle (117.5 1.08 = 126.9 liters). Since the commencement of the PM Kisan Sanman Nidhi scheme, diesel prices have witnessed a steep increase of Rs. 25 per liter. Consequently, this price hike imposes an additional fiscal burden of Rs. 3,125 (Rs. 25 per liter 125 liters) on farmers, which accounts for 52% of the cash incentive of Rs. 6,000 received through the PM Kisan scheme. It is important to note that this calculation solely reflects the impact of energy inflation on irrigation, disregarding the additional costs incurred during other agricultural activities, from plowing to harvesting and selling the produce.

In response to queries regarding the mounting financial burden on farmers due to rising diesel prices, the government pointed to the PM KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyaan) program, which aims to promote the use of solar pumps for irrigation. However, the progress of the scheme has been far from satisfactory.

Congress Member of Parliament, Deepak Baij, raised questions in the Lok Sabha in March 2021 regarding the assessment of the financial burden faced by farmers and the government's consideration of alternative solutions to alleviate the rising prices of diesel. On 9 March 2021, Agriculture minister Narendra singh tomar replied -

The Ministry of New and Renewable Energy (MNRE) is implementing Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyaan (PM-KUSUM Scheme), which, inter alia, provides for installation of 20 lakh standalone solar water pumps for replacement of existing diesel Agriculture pumps / irrigation systems in off-grid areas, where grid supply is not available.

But the Progress PM KUSUM scheme continues to be dismal. The following was observed by the parliament standing committee report tabled in march 2022 -

“Under component B, against the target of 20 lakh standalone solar pumps, only 78,940 pumps have been installed…… The Committee are extremely disappointed with the dismal performance of the Ministry under this scheme.”

Despite the government's commitment to doubling farmers' income by 2022, the agrarian crisis continues to persist. According to the National Statistical Office's Situation Assessment of Agricultural Households released in 2021, 50.2% of farming households are burdened with debt, with an average debt of Rs. 74,121. The report also highlighted that the average monthly income of a farmer is Rs. 10,218, which includes wages and income from animal husbandry. Given the precarious financial condition of farming households, the impact of energy inflation and the support provided by the PM Kisan scheme carry immense significance. Thus, there is a pressing need for the government to increase the cash benefits provided to farmers through the PM Kisan scheme.

As farmers continue to bear the brunt of rising diesel prices, the government must address their concerns and explore viable solutions to alleviate their financial burdens. Failure to take timely action could have severe consequences not only for the farming community but also for the nation's food security and overall economic stability.