Direct benefit transfer scheme for agriculture and its implications on smallholder farmers in West Bengal

Over the years, increasing expenditures on agriculture but declining profitability was posing a serious challenge to the farmers in India to continue their farming business gainfully. The scenario was even more stressing in the state like West Bengal, where over 95% of farmers were belonging to small and marginal categories, operating less than a hectare of land. They have limited investment capacity and weak financial linkages with the institutional agencies, cannot buy the required agricultural inputs in time and thereby failed to change their cropping pattern towards high value crops. Declining profitability of agricultural production systems forced many of the farmers to look for non-farm livelihoods options, leaving aside agriculture as primary occupation. Realizing the problems, central government (PM-Kisan) as well as few other state governments in India launched direct benefit transfers (DBT) of cash schemes for farmers. The present study was conducted to know the implications of one of such initiatives, Krishak Bandhu Scheme implemented in West Bengal, on farmers’ income. It was found that 58% of the farmers in study area were benefited under the scheme and received at least one or more installment from the scheme. On an average, the beneficiary farmers received Rs1757 per installment during January 2019 to April 2020. The assistance amount substantiated 9-16% of input costs incurred by smallholder farmers for growing different crops. Among beneficiaries about two-third utilized the cash mainly for agricultural activities such as buying seeds, payment to labor, buying fertilizer and pesticide etc. Farmers expected that the amount of financial assistance needed to be increased and disbursement might be given in time so that they can use it properly. One way of increasing the assistance could be, state’s participation in the centrally sponsored scheme, PM-Kisan and disbursing the money through online transfer of cash directly credited to the beneficiaries’ bank accounts instead of issuing the cheques. Cash benefits helped farmers to continue their agricultural operation even during the pandemic and lockdown situation due to COVID19 by reducing the input cost burden and the government should continue such scheme through inclusion of the excluded.