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INTRODUCTION
Agriculture sector in India still accounts for about 17.4% of GDP and 23% of
GNP. Roughly 49% of Indian Population still depends on Agriculture. This highly
reveals the fact that the Agricultural sector in India is unproductive. There is a lot
of disguised unemployment in agriculture and the agricultural labour receive
subsistence wages leading them to fall below the poverty line. India’s five-year
plans didn’t succeed in increasing productivity in the agricultural sector.Economic
reforms impacted agricultural prices and farmers income.Green revolution in the
1980s was a comeback which increased hopes among farmers and policymakers to
increase agricultural production, but the outcomes of which didn’t show a long
term effect instead had a long term effect on farmland and agricultural output.The
following subsection will analyze in detail various aspects and incidents which
played a major rule in the agrarian crisis.
During the first five year plan, India was having foodgrain crisis and was importing
foodgrains in large scale.Though the third plan shifted its focus from industry to
agriculture but its failure due to wars between India and China, India and Pakistan
didn’t achieve the anticipated growth rate by the end.
As mentioned in the above para, during first five year plan, increase in agriculture
production was given highest priority. One third of plan funds were devoted to
primary sector. However, during second five year plan, concentration was on
industrial growth. Where India witnessed urgency to improve food grain
production. And then the third five year plan, green revolution programme was
started but couldn’t meet its goals due to indo-pak war and Chinese aggression.
Fourth year plan was targeted at 5 percent annual growth rate in food grains but
ended up with 3 percent. Fifth year plan focus was only on self sufficiency of food
production and poverty eradication. Emphasis was given to expansion of irrigation
facilities. Consequently, a decent increase in food grain production was
observed.The sixth five year plan, the stress was laid on land reforms, more usage
of chemical fertilizers. The annual growth rate in food grains reached 6 percent,
recorded to be the highest until then. During seventh five year plan, areas of green
revolution were expanded and achieved over all steady annual growth rate in food
grains I.e; 4 percent. The eighth five year plan recorded a stagnant status in
foodgrain production. While ninth five year plan recorded a mixed success. The
National Agriculture Policy (2000) was adopted and several measures like
agriculture credits and insurance schemes for crops, watershed management were
taken up under the policy.During tenth five year plan , focus was laid on
sustainable growth technologically, environmentally, economically. Emphasized
the privatization of agriculture and price protection of produce solving marketing
problems.
In the mid 1960’s MSP was introduced to create incentive for adopting high
yielding varieties of Wheat and Paddy as India was in deficit of food grains and
importing large amount of grains from U.S,Due to the statement made by the then
Prime Minister of India “Lal Bahadur Shastri” that the ‘Vietnam War’ was an ‘act
of aggression’,the then president of U.S “Lyndon Johnson” had taken umbrage and
stopped exporting of food grains to India.India was left with very few food stocks
and this deepened food crisis.Shastri advised people to fast on Mondays.Realising
the importance of Farmers and their role to bring in self sufficiency he coined a
popular phrase “Jai Jawan,Jai Kisan”.Encouraging farmers to cultivate Wheat and
Paddy was very important and hence MSP was introduced in Wheat and Paddy
initially.It was successful in increasing farmers income with introduction of Green
Revolution.In 1970,MSP of Wheat was Rs.70 per quintal when the avg school
teacher salary was Rs.90 per month.But this glorius Period for farmers lasted
within 15 years.Inflatory prices in food grains due to MSP created low demand and
less purchasing power to people.The demise of agricultural sector began after mid
1980’s also due to the negative effects of Green Revolution.Liberalisation of trade
and cheap imports of food grains started post economic reforms.Hence the assured
MSP need to eventually fall.The avg salary of a school teacher which was Rs.90 in
1970 increased by 280-300 times in 2015,salary of government employees went up
by 120-150 times and college professors by 150-170 times,but Wheat prices were
increased only by 19 times during 45 year time period. MSP is introduced to
reduce uncertainities in market price and protect farmers,but in reality the assured
MSP in many cases is actually very less than the cost of production set by CACP
(Commission for Agricultural Costs and Prices) leading farmers to a vicous cycle
of never ending debt.For example in 2017 the cost of production of tur dal in
maharashtra was Rs.6240 per quintal and the announced MSP was around Rs.5040
per quintal.
SHIFT OF LABOR FROM AGRICULTURE TO URBAN AREAS AND
THEIR EFFECTS(Vamsi)
Farmer suicides in India is a national catastrophe, with farmers being forced into
suicides. Nearly 80% of the farmers are small farmers who are badly hit. Poor
harvest, lack of community support and financial devastation are the major factors
which lead farmers to commit suicide. To overcome poor harvest and to increase
their yield farmers go after buying expensive hybrid seeds. Later they realize that
these seeds require proper management using chemical fertilizers. Thus, they end
up spending immense amounts on buying modern chemical fertilizers sold by
MNCs. Even after spending this much, they often don’t get the desired outcome
due to a lot of factors, lack of proper irrigation being the most problematic one.
Now the farmer is forced into a vicious cycle with a suboptimal yield, even while
being forced to make payments on loans they’ve taken from informal sources often
at exorbitant rates of interest. Thus a farmer finds it difficult to face the
consequences and hence is forced to commit suicide. In this particular case the
family loses the breadwinner and most of the times women will have to come
forward and take the responsibility in taking care of their children completely.
According to NCRB’s report around 8000 farmers and 4500 agricultural laborers
have committed suicide in India during the year 2015. The government has
proposed many relief schemes and packages to provide ex gratia to their families,
waiving off loans and stopping the practice of private money lenders. But they
have generally been ineffective and misdirected. Some activists argue that waiving
off the credits won't help because the problems like poor productivity, lack of
irrigation and infrastructure facilities, controlled prices and expensive credit still
prevail. Farmers are considered the heart and soul of the nation but still face many
problems and farming is considered a high-risk profession even today.
EFFECT OF LOAN WAIVERS AND CROP INSURANCE ON
AGRICULTURE (Vamsi)
In most of the poll bound states, most political parties promise to waive farm loans
to woo the agricultural sector. The magnitude of the amount being waived off was
close to 2 trillion rupees in 8 states since April 2018. This has placed a huge
burden on the state exchequers and has mandated repeated warnings from RBI
about the deteriorating fiscal position of states which might lead to the breach of
3% threshold of fiscal deficit according to FRBM Act. In spite of these efforts,
they are hardly beneficial because of the conditional nature of waivers(restrictions
on the size of land, erratic cutoff dates) and the extent to which the benefits reach
the needy farmers. Besides, farmers who borrow loans from non-institutional
sources and those who rely on personal savings are outside the purview of waivers,
so this scheme is prone to serious inclusion and exclusion errors. Although loan
waivers act as a band-aid solution and may be necessary to provide some
immediate relief from a bad monsoon, they offer a meager chance of pulling
farmers of the debt trap and barely improve the situation of falling profitability
from agriculture. Loan waivers have also lead to diversion of funds from
irrigatonal facilities and R&D in agriculture. It further leads to a fall in credit
discipline as farmers become over-reliant on waivers and don’t repay future loans.
One of the sustainable solutions for this issue include direct benefit transfer, an
equitable and transparent method which has proved to be successful in Telangana.
Another important avenue to mitigate the losses of farmers against crop failure is
through the crop insurance scheme i.e the Pradhan Mantri Fasal Bhima Yojana.
This scheme has expanded the coverage to about 30% of farmers in 2018 and has
reduced the premium amount significantly. It also makes use of technology
extensively to estimate losses accurately and accelerate payments to farmers.
However there are serious issues in implementation that require quick readdressal
such as coverage for only certain types of crops, delays in settlement claims, lack
of awareness, improper documentation and it covers only those farmers who take
loans from banks and fails to cover sharecropper and tenant farmers. In this era of
extreme climate change, a farmer-friendly, universal and transparent agriculture
insurance is crucial to safeguard the livelihoods of farmers and the government
must ensure that it covers a majority of farmers within the next few years.
CONCLUSION(Meganaa Reddy)
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