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Context
Reducing agrarian distress
What should be done to alleviate agrarian distress in India?
- Accelerating industrial growth and improving the ease of doing business: The biggest priority is to reduce the workforce which depends on agriculture for its livelihood. This can only be done if ample job opportunities exist outside
- Banning Agricultural produce market Committees (APMCs): Farmer and buyer should be directly linked via elimination of middlemen. APMCs were established for that purpose but they themselves have proved to be inefficient and ineffective
- Providing access to formal Credit: Most of the farmers do not have access to institutional credit
- Reforming the flawed MSP regime: Assured MSPs in the areas where weather conditions are suited to other crops has resulted in little incentive to diversify crops
Some recent positive steps taken by government
To its credit some recent initiatives of the government are laudable
- Neem-coated fertilizer has reduced leakage, and direct benefit transfer to the farmer-buyer will reduce subsidy further
- Soil cards ensure appropriate matching of inputs to soil conditions
- Giving tax holiday to the farmer producer companies is also the right fiscal incentive
