Rythu Bandhu Scheme-A Welfare Program to Support Farm Investment in Telangana State of India
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Case Code: ECON075 Case Length: 12 Pages Period: 2018-2019 Pub Date: 2019 Teaching Note: Available |
Price: Rs.300 Organization : Rythu Bandhu Scheme Industry : Agriculture & Forestry Countries : India Themes: Public Policy, Government & Economy, Political Environment, Rural Markets |
Abstract Case Intro 1 Excerpts
"Farmers every year face lot of difficulties and hardships to mobilize investment for agriculture. If for any reason they fail to get proper crop, then they lose all the investment. This pushes them to financial troubles. To overcome all these problems the Government has decided to give them investment support."
– K. Chandrashekhar Rao, Chief Minister, Telangana State, India –in April 2018.
"Rythu Bandhu Scheme at the cost of state exchequer is benefitting landlords who have large land parcels in acres and travel in SUVs to receive cheque. The money should reach people/farmers who need it."
- Krishank, Spokesperson, Telangana Congress Party, India –in July 2018.
Introduction
On November 18, 2018, the Telangana State Government (TSG) announced that its two innovative farmer welfare schemes, the Rythu Bandhu Scheme (RBS) and the Rythu Bhima Scheme (Insurance Scheme) had been selected for a presentation at the international seminar of the Food and Agricultural Organization (FAO) held on November 21- 22, 2018, at its headquarters in Rome (Refer to Figure I (a) for RBS and figure I (b) for RBS Insurance Scheme logos). The seminar titled "International Symposium on Agricultural Innovation for Family Farmers" was organized under the aegis of the FAO of the United Nations Organization, and featured 20 success stories in agricultural innovation across the world (Refer to Exhibit I for Objectives of Rythu Bandhu Scheme).
The RBS entailed a provision of financial support to the farmers at Rs 8,000 per acre annually without the involvement of any middlemen. The amount was divided between the two crop seasons, kharif and rabi, at Rs 4,000 for each season and the farmers were given cheques with the beneficiaries’ name. The TSG had provided Rs 120 billion for the RBS in the 2018-19 budget. The second innovative farmer welfare scheme, the Rythu Bhima Scheme, provided a life insurance coverage of Rs 0.5 million for each farmer.
The payouts enabled the farmers to purchase seeds, pesticides, and fertilizers, and to pay for labor charges. As of February 2019, around 5.8 million farmers had benefitted from the scheme and the total area covered was 14.2 million acres. The main purpose of the scheme was to maximize agriculture production and productivity and protect the farmers from unscrupulous money lenders. C Parthasarathi, Principal Secretary, Agriculture Department, Telangana Government, stated that the scheme was a success and the available data pointed to the fact that after the implementation of the RBS in May 2018, there had been an increase in the paddy acreage by 40%. For the kharif season, the land area for sowing had increased to one million hectares in 2018 from 0.75 million hectares in 2017.
However, some analysts opined that RBS had many flaws. The scheme had not included tenant farmers who were victims of the agrarian distress. Moreover, rich farmers with large areas of land too became beneficiaries of the scheme because there was no land ceiling limit to become eligible for the scheme. There was no clarity on whether the RBS scheme was meant for farmers who actively cultivated the land and also for those who did not cultivate the land. As a result, even land owners not involved in cultivation had become part of the scheme and received financial support.
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