Rythu Bandhu: A lifeline scheme for farmers in Telangana

Scheme has provided relief but more needs to be done for tenant farmers and labourers.

A woman farmer points out the borders of her land. | Photo Credit: Ayesha Minhaz

Jayamma (name changed) is a 48-year-old Scheduled Caste farmer and her family holds two acres (I hectare is 2.47 acres) of assigned land in Brahmanapalle village of Madgul mandal in Telangana’s Rangareddy district. They also take about three to four acres on lease for about Rs.8,000 an acre. They grow only one crop a year as they do not have many farm hands to help them. Besides, the input costs are too high. When not on their farm, Jayamma and her husband work as farm labourers on chilli and cotton farms, and engage in other daily wage work.

For marginal farmers like Jayamma, farming stopped being the only source of livelihood long ago. However, the basic consumption needs, the need to keep cash flow, debt repayments, and the emotional attachment to farming keep them going. There is also a fervent hope that they might witness a miraculous year of profits. 

From the farm and wage work combined, the family makes Rs.7,000 to Rs.8,000 during most months. It is lower than the average monthly income of an agricultural household in Telangana—Rs.9,403 as per the Situation Assessment Survey (SAS) of agricultural households in rural India conducted by the National Statistical Office in 2019. The national average for that round of the survey was Rs.10,218.

Several years of crop losses and the subsequent loans taken for farming and personal needs have accumulated a debt of Rs.2.5 lakh for Jayamma’s family.

It is in this atmosphere of agrarian distress, low incomes, and uncertainty that Telangana’s flagship Rythu Bandhu scheme was launched in 2018.

“Whether we use it for paying school fees or buying a few packets of seeds or for that month’s consumption, Rythu Bandhu does provide us with some relief,” says Jayamma.

Flagship scheme

The Rythu Bandhu or Agricultural Investment Support Scheme is Telangana’s flagship direct benefit transfer programme, which provides Rs.5,000 an acre as assistance to all landowning farmers for each crop season. The scheme is aimed at meeting the “initial investment needs” and meant to “ensure that farmers do not fall again into the debt trap”. The farmers can choose to spend the amount on seeds, fertilizers, labour costs, or their personal consumption needs.

Since its inception, the Telangana government has spent a total of Rs.65,559.28 crore under the scheme over 10 crop seasons. Nearly 55 per cent of the allocation in the Budget for agriculture and allied activities was used for the Rythu Bandhu scheme in 2021-22.

In his Budget speech for 2023-24, Telangana Finance Minister T. Harish Rao spoke about the increase in the spending on the agriculture sector in the State since its formation. As compared with the 10 preceding years, the State spent 20 times more money on the agriculture sector. This amounts to a total of Rs.1,91,612 crore since 2014.

The number of beneficiaries has increased over the years. In 2018, there were nearly 50.25 lakh beneficiaries. In the latest round of disbursal, nearly 70.54 lakh farmers received investment support. The government has set aside nearly Rs.15,075 crore in the 2023 Budget for the Rythu Bandhu implementation.

Before the launch of the Rythu Bandhu scheme, the government took up a comprehensive Land Records Updation programme. The programme verified claims of ownership, succession, partition, land use information, and details about various types of government land, along with other information. The verification of land records reportedly helped in the efficient implementation of Rythu Bandhu.

Telangana’s agricultural sector has surely had an overhaul—with irrigation, power supply, investment support—as compared to when the region was a part of undivided Andhra Pradesh. For the Bharat Rashtra Samithi (BRS), Rythu Bandhu is a crucial part of the narration of its “success story”. It is pivotal for the party’s national endeavours as the farm crisis in India cuts across States and remains a crucial electoral issue. The “ab ki baar, kisaan sarkar” seems to have worked well for the BRS in the meeting held on February 5 in Nanded, Maharashtra.

Even its most vocal critics agree that the scheme has its merits. The BRS, however, seems reluctant to acknowledge criticisms of the scheme’s shortcomings.

Exclusion of tenant farmers

Like most States, socio-economic inequalities are prevalent in Telangana. Inequalities in rural areas are usually intertwined with land ownership. In the absence of land reforms or conditional cash transfers, schemes such as Rythu Bandhu aid in wealth accumulation and the furthering of pre-existing inequalities.

One of the principal objections to the scheme has been its exclusion of tenant farmers and the inclusion of absentee landlords or non-cultivating landowners. Further, there is no upper limit on landholding for a farmer to be eligible for the scheme. As long as one owns the land, money gets transferred into his or her account. In Brahmanapalle village, for instance, there are farmers who have received less than Rs.3,000 a crop season and there are others who have received nearly Rs.2.5 lakh under the same scheme.

A. Krishnaiah, a tenant farmer ploughing his fields in Nalgonda, Telangana. | Photo Credit: Singam Venkataramana

For farmers like Jayamma, the scheme, while being a buffer against uncertainties, is also a reminder of their socio-economic status in the village.

The government’s response to this criticism is that over 90 per cent of the beneficiaries are marginal and small farmers. This is not inaccurate.

“However, the fact that the area operated by these marginal and small farmers is about 61 per cent of the total area is often obfuscated by the government,” says Kiran Vissa, co-founder of Rythu Swarajya Vedika, a farmers’ rights organisation working in Telangana and Andhra Pradesh.

The scheme’s 10th round allocated Rs.7,676 crore to provide investment support to 70.54 lakh farmers. The government’s press notes about the current round of disbursals provide a closer view of the transfers.

For 21,02,822 farmers owning under 1 acre of land, Rs.607.32 crore was credited, averaging about Rs.2,888 a farmer. For 15.96 lakh farmers owning between 1 and 2 acres, Rs.1,218.39 crore was credited, averaging about Rs.7,634 a farmer.

The disbursal data for the other sizes of landholdings is not available yet. Most agricultural schemes use data on landholdings as a proxy for farmers. Based on the 2015-16 agriculture census, medium (9.89 to 24.77 acres) and large-sized (24.78 acres and above) landholdings constitute only 2.3 per cent of the total farmers in the State but operate 13.8 per cent of the total operated area. As per the Budget allocation for Rythu Bandhu in 2023-24, nearly Rs.2,000 crore will be deposited into the accounts of these 2.3 per cent of farmers over two cropping seasons.

“Nobody is questioning the motive behind giving money to people who are marginal and small farmers,” Kiran Vissa told Frontline. “It is only questionable when public money is given to the landlords. Our demand has been to put a cap on the acreage so that the largest portion of public spending goes to small and marginal farmers.”

Despite years of opposition, the BRS-led Telangana government has not agreed to this. Rythu Bandhu Samithi chairman and BRS MLC Palla Rajeshwar Reddy, speaking to Frontline, highlighted farmer feedback: “The discontent among farmers has reduced, the distress has reduced, and so has their expenditure on inputs.” Regarding the possibility of the inclusion of tenants in the scheme, Reddy said, “We do not want to take that risk. Anyway, except for a few political parties, nobody is asking for that.”

Ahead of the State’s Assembly election in 2018, there was pushback against tenant exclusion by opposition parties. With another Assembly election looming this year, the BJP and the Congress have again raised the issue of the exclusion of tenants. These calls appear to have not made an impact so far.

The debt trap

It has been over a decade since 35-year-old Venkatamma’s husband died by suicide due to mounting debt and failing crops. The Rs.2.5-lakh loan was insurmountable for him and he could not bear the pressure from creditors after successive seasons of failed crops. Venkatamma’s family did not receive compensation for the death from the then Andhra Pradesh government or the current Telangana government. They continue to live in Brahmanapalle.

Cotton and chillies are the primary crops this season in Venkatamma’s village. | Photo Credit: Ayesha Minhaz

Eleven years later, Venkatamma is still a farmer. The family continues to own one acre of land, which is inadequate to make a living. So, they lease three more acres (at Rs.6,000 an acre) from a relative who lives in Hyderabad. They grow cotton and chillies. The family needs at least Rs.5,000 a month to meet basic consumption needs, aside from other costs. So, Venkatamma and her elder son also work as labourers. Venkatamma works on chilli and cotton farms and are also enrolled under the Mahatma Gandhi National Rural Employment Guarantee Scheme.

It is very difficult to assess whether farming is Venkatamma’s primary income or her supplemental income. Yet, it remains her primary source of debt. Venkatamma’s loans are nearing Rs.3 lakh this year.

As per the SAS report of 2019, the average outstanding loan per agricultural household in Telangana was over Rs.1.5 lakh. Perhaps the next round of SAS or a similar study could provide more clarity on how Rythu Bandhu has interacted with indebtedness in agrarian households in Telangana.

Venkatamma’s family owns one acre of land, which is inadequate to make a living. So, they lease three more acres from a relative. | Photo Credit: Ayesha Minhaz

“For farmers like me, farming coexists with debt,” says Venkatamma. “It was slightly profitable last year. We retained roughly Rs.40,000 as profit. This year is going to be disappointing.”

Venkatamma gets Rs.10,000 aryear as part of the Rythu Bandhu scheme. For her, this is a significant help to meet household expenses in those months. At times, they do use it for some small farming expenses. However, it is not adequate for farmers like her to compensate for the cost of farm inputs.

As per the Government of Telangana’s Socio-Economic Outlook report from 2017, the cost of cultivation of cotton in the State increased by 150 per cent between 2009 and 2015 (from Rs.33,574 to Rs.84,045 a hectare). Venkatamma’s estimates of the cost of cultivation for her cotton farms match up with these numbers.

Most marginal farmers, however, continue to farm because wage work on its own is neither guaranteed nor adequate. As per anecdotal accounts, small farmers are on a similar spectrum, with their household incomes not vastly different from that of marginal farmers.

A glimpse of the final round of cotton-picking on a farm. | Photo Credit: Ayesha Minhaz

The benefits accrued to marginal and small farmers, both anecdotal and based on several micro-studies, are evidence that cash support does help to pull farmers out of deep distress and provide temporary relief. However, the systemic and structural issues of agrarian distress need more progressive steps that would involve challenging the social control of moneylenders, middlemen, and non-cultivating landlords.

Consumption gains

In a recent working paper titled “Land-Holding Inequality and Responses to Government Interventions”, authors Abhishek Shaw, Sawan Rathi, and Anindya S. Chakrabarti of the Indian Institute of Management, Ahmedabad, studied the impact of the Rythu Bandhu scheme.

“From our data in Telangana for small and marginal farmers who had outstanding borrowing before the implementation of Rythu Bandhu, about 43 per cent reported they were borrowing to meet consumption needs,” the authors told Frontline. “This changed quite dramatically after Rythu Bandhu was implemented, with only 13.5 per cent of households reporting that they were borrowing for consumption needs.”

Even though the authors’ reference scale for small and marginal farmers is not based on land size, it is not too different from that of the Agriculture Census data.

In their paper, the authors showed that after the implementation of Rythu Bandhu, many households were able to meet “some of their consumption needs out of the transfers”. The authors found that most of this money was used for “good consumption”, which includes spending on food, healthcare, petrol, and diesel.

Even though there were expectations that there would be some trickle-down from Rythu Bandhu beneficiaries to the landless workers, the study established that there was no effect on landless agricultural labourers.

The paper also found that the farmers who were not restrained by capital did not respond to the scheme in a similar manner. “Perhaps a narrower targeting rule (say transfers for only those with five or eight acres of land) would have yielded similar outcomes from a public policy perspective,” the authors told Frontline. “While all beneficiaries of transfers certainly made gains, not all probably needed scarce public resources to do so,” the authors added.

In Brahmanpalle, Bibi (name changed), a Muslim farmer with about 2.5 acres of land that is under a family dispute, splits the Rythu Bandhu money with her kin. This year, her share went towards hospital visits for her granddaughter.

“Most of us don’t keep records to track where that money went. It is a small amount and there is always some new need coming up every year,” Bibi says.

The Crux

• Telangana’s flagship Rythu Bandhu scheme was launched in 2018 in an atmosphere of agrarian distress, low incomes, and uncertainty.
• The Rythu Bandhu or Agricultural Investment Support Scheme is the State’s flagship direct benefit transfer programme, which provides Rs.5,000 an acre as assistance to all landowning farmers for each crop season.
• In 2018, there were nearly 50.25 lakh beneficiaries and in the latest round of disbursal, nearly 70.54 lakh farmers received investment support.
• One of the principal objections to the scheme has been its exclusion of tenant farmers and the inclusion of absentee landlords or non-cultivating landowners.
• “Nobody is questioning the motive behind giving money to people who are marginal and small farmers,” said Kiran Vissa, co-founder of Rythu Swarajya Vedika, a farmers’ rights organisation working in Telangana and Andhra Pradesh. “It is only questionable when public money is given to the landlords.
• Even though there were expectations that there would be some trickle-down from Rythu Bandhu beneficiaries to the landless workers, a recent working paper established that there was no effect on landless agricultural labourers.