Farmers Distress

  • The year 2017 was marked by several farmers’ protests nationwide, with a few turning violent
  • The protests highlighted the plight of farmers and the extent of agrarian distress.
  • In June, 2017, some farmers were killed in police firing in Mandsaur, Madhya Pradesh, during an agitation for better crop prices
  • In June 2018, many farmers are on an unusual 10-day ‘strike’ to draw the government’s attention to distress in the fields. A federation of 130 farmer bodies has decided to stop supplies of vegetables and dairy produce to major cities and hold a dharna on 30 national highways, without blocking vehicular passage.
What are the Farmers’ Demands?
  • Enhancement of the minimum support price regime for crops in line with the M.S. Swaminathan Commission’s recommendations, higher prices for milk procurement and loan waivers to offset low or negative returns on investment.
  • Stir also derives from lack of tangible action on assurances made earlier and imperceptible movement on the Centre’s grand promises such as doubling farm incomes and raising MSPs.
Reasons for the crisis:
  • The main reason for farm crises is the rising pressure of population on farming and land assets
  • Government data show the average farm size in India is small, at 1.15 hectare
  • The small and marginal land holdings (less than 2 hectares) account for 72% of land holdings
  • This predominance of small operational holdings is a major limitation to reaping the benefits of economies of scale
Other factors
  • Crop production is always at risk because of pests, diseases, shortage of inputs like seeds and irrigation, which could result in low productivity and declining yield
  • The lower than the remunerative price in the absence of marketing infrastructure and profiteering by middlemen adds to the financial distress of farmers
  • The predominance of informal sources of credit, mainly through moneylenders, and lack of capital for short term and long term loans have resulted in the absence of stable incomes and profits
  • Uncertain policies and regulations such as those of the Agricultural Produce Market Committee (APMC Act), besides low irrigation coverage, drought, flooding and unseasonal rains, are some other factors that hit farmers hard
Price mechanism
  • Farmers face price uncertainties due to fluctuations in demand and supply owing to bumper or poor crop production and speculation and hoarding by traders
  • The government’s economic survey for 2016-17 points out that the price risks emanating from an inefficient APMC market are severe for farmers in India
  • This is because they have very low resilience because of the perishable nature of produce, inability to hold it, hedge in surplus-shortage scenarios or insure against losses
Way forward
  • Like any other economic activity, the farming sector has its own set of risks
  • To increase and ensure a stable flow of income to farmers it is vital to manage and reduce the risks by analysing, categorising and addressing them.
  • The government must move purposefully to address the systemic malaise in agriculture.
Note Keywords:
M.S. Swaminathan Formula to solve the farmers’ problems, Doubling Farmer’s income

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