AGRARIAN CRISIS – FARMER DISTRESS – ANALYSIS

WHAT ARE THE ISSUES?

• Over 12,000 suicides were reported in the agricultural sector every year since 2013. Maharashtra topped the
list,followed by Karnataka,Telangana, Madhya Pradesh, Chhattisgarh , Andhra Pradesh,Tamil nadu.Together,
these 7 states accounted for around 90% of total suicides in the farming sector in the country.
• Though agriculture now accounts for 17% of gross domestic product (GDP), it is still the main source of
livelihood for nearly half our population. Agriculture is still the core of our food security.
• Focus on short-term policies: The recent trend of moderation in imports(30% customs duty slapped on
the import of chana dal and masoor dal) doesn’t add up to a serious long-term policy, which should be aimed at
boosting farm incomes and ensuring food security.
• Farmers, like investors, need predictability and consistency in government policies.
• Traders still import:With an adequate domestic stockpile of pulses and with international prices
remaining low for a prolonged period, the Centre fears that traders may still prefer to import some
pulses rather than buy the fresh crop from local farmers at higher prices. There has been a significant upsurge
in imports in 2017. In 2017, the total import of pulses increased by 20%.
• Blunder policies:Example of pulses in 2016-17: Despite a bumper harvest, after good rains, export
controls and stocking limits for private traders were retained and a record volume of imports
allowed to be shipped in.
• Even after four years of systematically aggressive hikes, Indian MSPs of rice and wheat are less than support
prices in China and other Asian countries.
• MSPs are effective only for wheat and rice and, occasionally, for a couple of other crops in a handful of
states. Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure
agricultural producers against any sharp fall in farm prices. The minimum support prices are announced by the
Government of India at the beginning of the sowing season (sowing means plant (seed) by scattering it on or
in the earth) for certain crops on the basis of the recommendations of the Commission for Agricultural Costs
and Prices (CACP). MSP is price fixed by Government of India to protect the producer - farmers - against
excessive fall in price during bumper production years. The minimum support prices are a guarantee price for
their produce from the Government. The major objectives are to support the farmers from distress sales
and to procure food grains for public distribution. In case the market price for the commodity falls below
the announced minimum price due to bumper production, government agencies purchase the entire quantity
offered by the farmers at the announced minimum price.
• Avg farm size: 2.25 hectares(1970), 1.25 hectares(2010) .This decrease results in less agricultural income.
• Socio Economic and Caste Census (SECC) 2011 : Landlessness and dependence on manual casual labour
for a livelihood are key deprivations facing rural families.SECC mapped deprivation using seven indicators:
✓ households with a kuchha house;
✓ without an adult member in working age;
✓ headed by a woman and without an adult male in working age;
✓ with a disabled member and without able-bodied adult;
✓ of Scheduled Castes/Scheduled Tribes (SC/ST);
✓ without literate adults over 25 years;
✓ landless households engaged in manual labour.
• The more the number of parameters on which a household is deprived, the worse its extent of poverty. Nearly
30% have two deprivations.
• Around 50% of all rural households suffer from at least one deprivation indicator, “landless households
engaged in manual labour” are more vulnerable.
• Nearly 50 million households are in the landless-labourer category; assuming that each such household has
five members, that makes 250 million of the nearly 900 million rural population. This number is almost certainly
an underestimate.
• 80% of all those who even hold agricultural land are small and marginal farmers.‘Marginal
Farmer’ means a farmer cultivating (as owner or tenant or share cropper) agricultural land up to 1 hectare (2.5
acres).‘Small Farmer’ means a farmer cultivating (as owner or tenant or share cropper) agricultural land of more
than 1 hectare and up to 2 hectares (5 acres).
• Growth of gross value added (GVA) in agriculture declined from 6.3% in 2016-17 to 2.1% in 2017- 18.
• The average growth rate of agricultural GDP in the last four years was only 2.1% per annum.
• The growth rate of farmer incomes between 2003 and 2013 was only 3% per annum. If we want to double
farmer incomes, growth should be more than 10%.
• Climate change might reduce farm incomes by up to 20% in the medium term.
• Farmers are not getting remunerative prices for their produce.
• The distortions in the agricultural produce market committee (APMC) system. Agricultural Produce
Market Committee (APMC) is a statutory market committee constituted by a State Government in respect
of trade in certain notified agricultural or horticultural or livestock products, under the Agricultural Produce
Market Committee Act issued by that state government. APMCs are intended to be responsible for:
✓ ensuring transparency in pricing system and transactions taking place in market area;
✓ providing market-led extension services to farmers;
✓ ensuring payment for agricultural produce sold by farmers on the same day;
✓ promoting agricultural processing including activities for value addition in agricultural produce;
✓ Publicizing data on arrivals and rates of agricultural produce brought into the market area for sale; and
✓ Setup and promote public private partnership in the management of agricultural markets
There are about 2500 principal regulated markets based on geography (the APMCs) and 5000 sub-market yards
regulated by the respective APMCs in India.The typical amenities available in or around the APMCs are: auction halls,
weigh bridges, godowns, shops for retailers, canteens, roads, lights, drinking water, police station, post-office, bore-
wells, warehouse, farmers amenity center, tanks, Water Treatment plant, soil-testing Laboratory, toilet blocks, etc.
• Water scarcity and limited efficiency in existing irrigation schemes.
• Significant price fluctuations in perishables such as onions, potatoes and tomatoes.

REFORMS NEEDED
• Land reform
✓ Reforms in tenancy laws, land leasing, distribution of ceiling surplus land and wasteland.
✓ Prevent diversion of prime agricultural land and forest to the corporate sector for non-agricultural
purposes.
✓ Establish a National Land Use Advisory Service, which would have the capacity to link land use
decisions with ecological meteorological and marketing factors on a location.
• Water:Rainwater harvesting and aquifer recharge,sprinkler and drip irrigation.Cultivation of low water
requiring crops, such as pulses and oilseeds.When a water-bearing rock readily transmits water to wells and
springs, it is called an aquifer. Wells can be drilled into the aquifers and water can be pumped out.
• Livestock: Establish Livestock Feed and Fodder Corporations at the State Level for ensuring
availability of quality fodder and feed.A National Livestock Development Council may be established.
• Fisheries:Quality literacy to safeguard the harvested fish from Salmonella infections, Inland
aquaculture, Artificial coral reefs to compensate for the loss of natural coral reefs to revive the fish catch.
• Credit and Insurance
✓ Establish an Agriculture Risk Fund to provide relief to farmers in the aftermath of successive natural
calamities.
✓ Kisan Credit Cards should be issued to women speedily with joint pattas to house/agricultural land
as collateral.The Kisan Credit Card (KCC) scheme is a credit scheme introduced in 1998 by Indian
banks.This model scheme was prepared by the National Bank for Agriculture and Rural
Development (NABARD) on the recommendations of R.V.GUPTA committee to provide term loans
and agricultural needs. Its objective is to meet the comprehensive credit requirements of the
agriculture sector by giving financial support to farmers. Participating institutions include all
commercial banks, Regional Rural Banks, and state co-operative banks. The scheme has
short term credit limits for crops, and term loans. KCC credit holders are covered under personal
accident insurance up to 50,000 for death and permanent disability, and up to 25,000 for other risk.
• Identification of new genotypes for treating pest and disease syndromes, as well as adverse weather
conditions.
• Cooperative Farming and Service Cooperatives: can provide centralized services like tractors and
other farm equipment to support small-scale decentralized production. Cooperative farming refers to an
organisation in which:each member-farmer remains the owner of his land individually.But farming is
done jointly.Profit is distributed among the member-farmers in the ratio of land owned by
them.Wages distributed among the member-farmers according to number of days they worked.In other
words, Cooperative farming= pooling of land and practicing joint agriculture. Cooperative farming is
not a new concept in India. Since ancient times, Indian farmers have been giving mutual aid to each other in
weeding, harvesting etc. Service co-operatives exist to provide a service to their members.It means for
example that it does not provide services to other than its members and therefore that users of its services
must become members.
 • Group Farming by Self-help Groups: encouraging groups to lease farmland(ie,operate in some property
through purchasing a long term contract from the owner). Maharashtra gave its approval for promoting
group farming as a model to double farm production by 2022. Every year, 200 farmers would be shortlisted
for group farming with financial incentives up to Rs.1 crore to each group. According to the group farming
policy, it would be mandatory for atleast ten farmers to come together with a cumulative land holding of
100 acres. To make group farming a success, there would be guidance on the crop pattern and
technique of farming. Technology would be adopted to promote scientific farming. The biggest advantage
of group farming would be to help individual farmers to collectively shoulder the investment expenditure.
Since farming would be on 100 acres, it would enable them to make maximum use of machines and
technology at a reasonable cost. Individual farmers with small land holding not exceeding 5 acres find it
extremely difficult to adopt technology or machines as it multiplies overall investment expenses.
• Contract Farming involves agricultural production being carried out on the basis of an agreement
between the buyer and farm producers. Sometimes it involves the buyer specifying the quality required and
the price, with the farmer agreeing to deliver at a future date.
• Policies of integrated pest management to prevent pest damage: Inspiration from Vietnam’s no-spray
early rule (no insecticide application for 40 days.predatory beetles are sustained for pest control, cutting
pesticide requirement by 50%) can be a good way to start.
• Precision farming techniques like SRI(System of Rice Intensification):The System of Rice
Intensification (SRI) is a methodology aimed at increasing the yield of rice produced in farming. It is a low
water, labor-intensive method that uses younger seedlings singly spaced and typically hand
weeded with special tools.Principles included applying a minimum quantity of water and the individual
transplanting of very young seedlings in a square pattern.Key components in SRI are:younger seedlings, only
a single seedling instead of handful of seedlings, square shaped cropping patterns with more distance
between seedlings,organic farming,intermittent watering. In Andrapradesh, SRI fields achieved 2
additional tonnes per heactare average while using 90% less seed and 50% less water.
• Subsidies must be rerouted towards capital generation.
• Corporate Social Responsibility(CSR) .We need to ensure that institutional financing is available. A
corporation's initiatives to assess and take responsibility for the company's effects on environmental and
social wellbeing. The term generally applies to efforts that go beyond what may be required by regulators or
environmental protection groups.
• Village-wise lists of deeply indebted farmers must be prepared annually to identify farmers on the
flight path to potential suicide.
• A sensible policy would be to buy from farmers when market prices are depressed and sell stocks in
the open market when prices are elevated. In the first scenario, if the MSP is pegged higher than the
market price, the procurement will raise the market price, boosting farm incomes. In the latter,
by offloading its stocks at a price lower than the market price, government can cushion consumers against
excessive inflation.

BOOM IN CONSTRUCTION EMPLOYMENT

• The real net domestic product of the construction sector had only increased at the annual rate of 4%
between 1970 and 1995. From 1995-2012, the growth rate in the construction sector output accelerated to
10%.
• Employment in the construction sector increased 13 times during the past four decades, which led to its
share in rural employment rising from 1% in 1970 to 10% in 2012.
• This sector absorbed 75% of the new jobs created in non-farm sectors in rural areas from 2004-2012.
• Construction jobs are growing more slowly since 2012, as public investment has fallen.
• The rising NPA of banks & the private investment has fallen as well →fewer workers have been leaving
agriculture since 2012.This is hurting landless labour and small and marginal farmers the most,
since their households had benefited the most from the tightening of the labour market that had ensued in
rural and urban areas because of rising construction jobs.
• Main reasons:
✓ There are fewer skill and educational requirements in construction.
✓ Sustained growth in investment in infrastructure.
✓ There was a real boom in real estate,residential and commercial, throughout the country.
FARMERS WELFARE SCHEMES
Soil Health Card Scheme:
• Launched in 2015, the scheme has been introduced to assist State Governments to issue Soil Health Cards
to all farmers in the country. The Soil Health Cards provide information to farmers on nutrient status of
their soil alongwith recommendation on appropriate dosage of nutrients to be applied for
improving soil health and its fertility.
• As on 11.7.2017, against target of 253 lakh soil samples, all 253 lakh soil samples have been collected and 245
lakh (97%) samples have been tested. Against target of 12 crore Soil Health Cards, so far 9 crore (76%)
cards have been distributed to farmers.

Neem Coated Urea (NCU):

• Scheme being promoted to regulate use of urea, enhance availability of nitrogen to the crop and
reduce cost of fertilizer application. NCU slows down the release of fertilizer and makes it available to
the crop in an effective manner. The entire quantity of domestically manufactured and imported urea is now
neem coated. The reports from field are positive. The expected saving is 10% of urea consumption, thereby
resulting in reduced cost of cultivation and improved soil health management.

Paramparagat Krishi Vikas Yojana (PKVY):

• Paramparagat Krishi Vikas Yojana (PKVY) is being implemented with a view to promote organic farming
in the country. This will improve soil health and organic matter content and increase net income of the farmer
so as to realise premium prices. Under this scheme, an area of 5 lakh acre is targeted to be covered through
10,000 clusters of 50 acre each, from the year 2015-16 to 2017-18.
• So far 7000 clusters have been formed and remaining clusters would be formed during 2017-18.

Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) :

• Launched on 1st July, 2015 with the motto of ‘Har Khet Ko Paani’, the Pradhan Mantri Krishi Sinchayee
Yojana (PMKSY) is being implemented to expand cultivated area with assured irrigation, reduce wastage
of water and improve water use efficiency. PMKSY not only focuses on creating sources for assured irrigation,
but also creating protective irrigation by harnessing rain water at micro level through ‘Jal
Sanchay’ and ‘Jal Sinchan’. Micro irrigation is also incentivized through subsidy to ensure ‘Per drop-More
crop’. The target under micro-irrigation for the year 2016-17 was 8 lakh ha. against which 8.39 lakh ha have
been covered.
• PMKSY = Accelerated Irrigation Benefit Programme (AIBP) of the Ministry of Water Resources, River
Development & Ganga Rejuvenation (MoWR,RD&GR), + Integrated Watershed Management
Programme (IWMP) of Department of Land Resources (DoLR) + On Farm Water Management
(OFWM) of Department of Agriculture and Cooperation (DAC).
• The scheme will be implemented by Ministries of Agriculture, Water Resources and Rural Development.
• The major objective of PMKSY is to achieve convergence of investments in irrigation at the field level, expand
cultivable area under assured irrigation, improve on-farm water use efficiency to reduce wastage of water and
enhance the adoption of precision-irrigation and other water saving technologies (More crop per drop).
• Programme architecture of PMKSY will be to adopt a ‘decentralized State level planning and projectised
execution’ structure that will allow States to draw up their own irrigation development plans based on District
Irrigation Plan (DIP) and State Irrigation Plan (SIP).
• It will be operative as convergence platform for all water sector activities including drinking water &
sanitation, MGNREGA, application of science & technology etc. through comprehensive plan.
• State Level Sanctioning Committee (SLSC) chaired by the Chief Secretary of the State will be vested
with the authority to oversee its implementation and sanction projects.
• The programme will be supervised and monitored by an Inter-Ministerial National Steering
Committee (NSC) will be constituted under the Chairmanship of Prime Minister with Union Ministers from
concerned Ministries.
• A National Executive Committee (NEC) will be constituted under the Chairmanship of Vice Chairman,
NITI Aayog to oversee programme implementation, allocation of resources, inter ministerial coordination,
monitoring & performance assessment, addressing administrative issues etc.
• PMKSY funds- 75% from central govt and 25% from state govt. But for North eastern states 90% from central
govt.
• Interlinking of perennial rivers
• PMKSY is linked with MGNREGA to channelize the available workforce.
National Agriculture Market (e-NAM):
• The National Agriculture Market scheme (e-NAM) envisages initiation of e-marketing platform at national
level and to support creation of infrastructure to enable e-marketing in 585 regulated markets
across the country by March 2018. This innovative market process is revolutionizing agri markets by ensuring
better price discovery, bringing in transparency and competition to enable farmers to get improved
remuneration for their produce moving towards ‘One Nation One Market’

Pradhan Mantri Fasal Bima Yojana (PMFBY)/ Restructured Weather Based Crop Insurance Scheme
(RWBCIS):
• Pradhan Mantri Fasal Bima Yojana (PMFBY) & Restructured Weather Based Crop Insurance Scheme
(RWBCIS) were launched from Kharif 2016 to provide comprehensive crop insurance coverage from pre-
sowing to post harvest losses against non-preventable natural risks. These schemes are only risk
mitigation tools available to farmers at extremely low premium rates payable by farmers at 2% for Kharif
crops, 1.5% for Rabi Crop and 5% for annual commercial/horticultural crops. The balance of
actuarial premium is shared by the Central and State Governments on 50:50 basis. The schemes are
voluntary for States and available in areas and crops that are notified by the State Governments.Further, the
schemes are compulsory for loanee farmers and voluntary for non-loanee farmers.
• The scheme aims to reduce the premium rates to be paid by the farmers so as to enable more farmers avial
insurance cover against crop loss on account of natural calamities.
• Farmers will have to pay a uniform premium of 2% for Kharif crops and 1.5% for rabi crops.
• For annual commercial and horticuture crops the farmers will have to pay a premium of 5% and the rest of the
amount will be shared equally by the state and the central govt.
• Under PMFBY, there will be no upper limit for govt subsidy.

Interest Subvention Scheme (ISS):

• The interest subvention scheme for farmers aims at providing short term credit to farmers at subsidised
interest rate. The Government provides interest subvention of 3% on short-term crop loans up to
Rs.3 lakh. Presently, loan is available to farmers at an interest rate of 7% per annum, which gets reduced
to 4% on prompt repayment. Further, under Interest Subvention Scheme 2016-17, in order to provide relief to
the farmers on occurrence of natural calamities, the interest subvention of 2% shall continue to be available to
banks for the first year on the restructured amount. In order to discourage distress sale by farmers and to
encourage them to store their produce in warehouses against negotiable warehouse receipts, the benefit of
interest subvention will be available to small and marginal farmers having Kisan Credit Card for a further
period of upto 6 months post harvest on the same rate as available to crop loan.
• Agriculture is a State subject and the State Governments are primarily responsible for the growth and
development of agriculture sector in their respective States. The Government supplements the efforts of States
through appropriate policy measures and budgetary support. Presently the approach of the Government of
India has shifted from production centric to income centric platform in the agriculture sector and the
above schemes are being implemented for making farming viable.

Deen dayal upadhyaya gram jyoti yojana

• Round the clock power to rural houses and agricultural consumers.
• The earlier scheme was Rajiv gandhi Grameen Vidyutikaran Yojana(RGGVY).
• Under Ministry of Power.
• Focuses on Feeder seperation on rural households and agriculture and strengtheningof sub-transmission
infrastructure in rural area.
• rural electrification.
• metering at all levels(input points,feeders and distribution transformers.)

DD KISAN
• India's first channel exclusively for farmers.
BUDGET 2018-19 PROPOSALS
• A minimum support price of 1.5 times the input cost for Kharif crop to farmers.
• Developing and upgrading the existing 22,000 rural haats into gramin agricultural markets
(GrAMs).These GrAMs, electronically linked to e-NAM will provide farmers to make direct sale to
consumers and bulk purchasers.
• Agri-Market Infrastructure Fund will be setup for developing and upgrading agricultural marketing
infrastructure in the GrAMs and APMCs.
• Setting up of a fisheries and aquaculture infrastructure development fund (FAIDF) and animal
husbandry infrastructure development fund (AHIDF) with a corpus of Rs10,000 crore.
• Doubling the allocation for the food processing sector.
• 100% tax deduction for Farmer producer companies.
• ‘‘Operation Greens’’ with an outlay of Rs.500 Crore to address the challenge of price volatility of
perishable commodities like tomato, onion and potato. The idea behind Operation Greens is to double the
income of farmers by end of 2022. Operation is essentially a price fixation scheme that aims to ensure
farmers are given the right price for their produce.
• Organized cultivation of highly specialized medicinal and aromatic plants.
• Organic farming by Farmer Producer Organizations (FPOs) and Village Producers’ Organizations (VPOs) in
large clusters will be encouraged.
• Re-structured National Bamboo Mission to promote bamboo sector in a holistic manner.
• Extending Kisan Credit Cards to fisheries and animal husbandry farmers to help them meet their
working capital needs.
• Liberalizing farm export policies and setting up state-of-the-art testing facilities in mega food parks.

PREVIOUS YEAR QUESTIONS

• Explain various types of revolutions, took place in Agriculture after Independence in India. How these
revolutions have helped in poverty alleviation and food security in India? 2017
• Given the vulnerability of Indian agriculture to vagaries of nature, discuss the need for crop insurance and
bring out the salient features of the Pradhan Mantri Fasal Bima Yojana (PMFBY). 2016
• How can the ‘Digital India’ programme help farmers to improve farm productivity and income? What steps
has the Government taken in this regards? 2015
• In view of the declining average size of land holdings in India which has made agriculture non-viable for a
majority of farmers, should contract farming and land leasing be promoted in agriculture? Critically evaluate
the pros and cons. 2015
• There is also a point of view that agriculture produce market committees (APMCs) set up under the state acts
have not only impeded the development of agriculture but also have been the cause of food inflation in
India.Critically examine. 2014
• Establish the relationship between land reform, agriculture productivity and elimination of poverty in Indian
Economy. Discussion the difficulty in designing and implementation of the agriculture friendly land reforms
in India. 2013