{"id":241191,"date":"2023-05-06T19:49:49","date_gmt":"2023-05-06T14:19:49","guid":{"rendered":"https:\/\/blog.forumias.com\/?page_id=241191"},"modified":"2023-05-06T20:01:46","modified_gmt":"2023-05-06T14:31:46","slug":"agriculture-distress","status":"publish","type":"page","link":"https:\/\/forumias.com\/blog\/agriculture-distress\/","title":{"rendered":"Agriculture distress"},"content":{"rendered":"<p>Agriculture distress refers to\u00a0 low crop yields, fluctuating agricultural produce prices, high input costs, indebtedness, and a lack of access to credit experienced by the farmers.<\/p>\n<h2>Agriculture distress: Causes<\/h2>\n<p><strong>Declining Average Size of Farm Holdings:<\/strong><\/p>\n<ul>\n<li>The main reason for farm crises is the rising pressure of population on farming and land assets.<\/li>\n<li>Government data show the average farm size in India is small, at 1.15 hectare, and since 1970-71, there has been a steady declining trend in land holdings.<\/li>\n<li>The small and marginal land holdings (less than 2 hectares) account for 72% of land holdings, and this predominance of small operational holdings is a major limitation to reaping the benefits of economies of scale.<\/li>\n<li>Since small and marginal farmers have little marketable surplus, they are left with low bargaining power and no say over prices.<\/li>\n<\/ul>\n<p><strong>Natural calamities resulting in crop losses or serious reduction in yields:<\/strong><\/p>\n<ul>\n<li>Rising temperatures, floods, and excessive rains in a short period of time cause substantial agricultural damage.<\/li>\n<li>For example, in 2020-21, several states in India experienced floods, which damaged crops such as paddy, maize, and soybean. (Source: Ministry of Agriculture and Farmers Welfare)<\/li>\n<\/ul>\n<p><strong>Declining agricultural productivity:<\/strong><\/p>\n<ul>\n<li>The average yield of main crops in India, such as wheat and rice, has been stagnant or declining, resulting in a decrease in farmer income.<\/li>\n<li>For example, the average rice yield in India in 2010-11 was 2,748 kg\/ha, but it fell to 2,436 kg\/ha in 2019-20.<\/li>\n<li>Similarly, the average wheat yield in India in 2010-11 was 2,948 kg\/ha, but it fell to 2,692 kg\/ha in 2019-20. (Source: Agriculture, Cooperation, and Farmers Welfare Department)<\/li>\n<\/ul>\n<p><strong>Increasing cultivation costs:<\/strong><\/p>\n<ul>\n<li>The cost of cultivation, including the cost of inputs such as seeds, fertilisers, and labour, has been continuously rising in recent years, putting further financial strain on farmers.<\/li>\n<li>In India, for example, the average cost of cultivation per hectare for paddy was Rs 1,866 in 2010-11, rising to Rs 2,796 in 2019-20. (Source: Agriculture, Cooperation, and Farmers Welfare Department)<\/li>\n<\/ul>\n<p><strong>Inadequate market infrastructure and poor implementation:<\/strong><\/p>\n<ul>\n<li>According to the Organisation for Economic Cooperation and Development (OECD), the agricultural sector is in distress due to a mix of market rules and infrastructure shortcomings.<\/li>\n<li>To this, there has been a lack of technological advancement, which has hampered production, as well as a lack of food processing centres, which has hampered farmers&#8217; incentives to diversify.<\/li>\n<li><strong>According to a Niti Aayog study,<\/strong> farm sector growth has overlooked the selling potential. Farmers&#8217; access to well-developed markets remains a problem, despite various initiatives to build an electronic market place.<\/li>\n<li>Experts recommend establishing a body similar as the <strong>GST Council<\/strong> to bring states and the Centre together to make decisions on reforming the sector and improving farmers&#8217; access to markets.<\/li>\n<\/ul>\n<p><strong>Lack of credit:<\/strong><\/p>\n<ul>\n<li>Many farmers in India lack access to formal credit and have to rely on informal sources of credit, which frequently carry high interest rates.<\/li>\n<li>According to the National Bank for Agriculture and Rural Development (NABARD), the average agricultural loan in India in 2019-20 was Rs 56,740, which is significantly less than the average cost of cultivation per hectare for several crops.<\/li>\n<\/ul>\n<p><strong>Undermining of the MSP system:<\/strong><\/p>\n<ul>\n<li>When the government fails to boost inventories at MSP, it undermines the MSP system&#8217;s core objective, which is to ensure farmers receive a fair price for their produce.<\/li>\n<li>Farmers&#8217; trust in the MSP system may suffer as a result, as will their willingness to invest in agriculture.<\/li>\n<\/ul>\n<p><strong>Modern technology is lacking:<\/strong><\/p>\n<ul>\n<li>\u00a0Access to contemporary technologies may increase productivity by improving the variety of seeds, farm implements, and farming technology.<\/li>\n<li>According to a Niti Aayog study, there has been no significant technological advancement in recent years.<\/li>\n<\/ul>\n<p><strong>Fragmented supply chain:<\/strong><\/p>\n<ul>\n<li>Farmers&#8217; troubles have been exacerbated by large gaps in storage, cold chains, and insufficient communication.<\/li>\n<li>It has also contributed to the large post-harvest losses of fruits and vegetables, which are estimated to be 4% to 16% of total output. ( as per OECD report)<\/li>\n<\/ul>\n<h2>Agriculture Distress: Impact<\/h2>\n<p>Agricultural distress in India can have a huge economic impact because agriculture contributes significantly to the country&#8217;s GDP and employment.<\/p>\n<ul>\n<li><strong>Agricultural growth fall:<\/strong>\n<ul>\n<li>Agricultural distress can lead to a decline in agricultural growth, which can have a knock-on effect on the entire economy.<\/li>\n<li>For instance, as per Statistics and Programme Implementation Ministry, the growth rate of agriculture and allied sectors in India was expected to be 3.4% in 2020-21, down from 4.3% the previous year.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Slowing of rural demand:<\/strong>\n<ul>\n<li>When farmers faces distress, their earnings and purchasing power may fall, resulting in a slowing of rural demand for products and services.<\/li>\n<li>As per data of <strong>NSO,<\/strong> the growth rate of rural consumption spending in India in 2020-21 was anticipated to be 1.4%, lower than the 2.4% growth rate of urban consumption expenditure. (Data from the National Statistical Office)<\/li>\n<\/ul>\n<\/li>\n<li><strong>Rise in bank non-performing assets (NPAs):<\/strong>\n<ul>\n<li>Agricultural distress can lead to an increase in bank non-performing assets (NPAs), as farmers may be unable to repay their loans.<\/li>\n<li>As of 2022, Farm sector NPAs constitute 17.4 per cent of the total banking sector NPAs, against 15.07 per cent in the previous year, according to Reserve Bank of India (RBI) data.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Job losses in agriculture:<\/strong>\n<ul>\n<li>When agriculture is in distress, producers may be compelled to downsize their workforce or may be unable to hire personnel, resulting in job losses in agriculture.<\/li>\n<li>As per data from the National Sample Survey Office (NSSO)the expected number of agricultural employees in India in 2019-20 was 14.5 crore, down from 15.3 crore in 2011-12.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Increased migration:<\/strong>\n<ul>\n<li>Migration to cities is a major trend that will impact food security and nutrition in the next years.<\/li>\n<li>The annual percent change in urban population is higher than the global average, indicating that internal migration is accelerating.<\/li>\n<li>It is estimated that by 2050, more than half of the Indian population would be living in cities.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<table style=\"width: 100.243%;\">\n<tbody>\n<tr>\n<td style=\"width: 100%;\" width=\"638\"><strong>Covid 19 and Agricultural distress: How pandemic affected agriculture sector<\/strong><\/p>\n<ul>\n<li>The COVID-19 epidemic had a significant impact on agriculture in India, worsening the country&#8217;s pre-existing agrarian misery.<\/li>\n<li>The pandemic and related lockdowns disrupted supply systems, causing demand and prices for agricultural products to decrease. Farmers were unable to sell their harvests, causing substantial financial losses.<\/li>\n<li>The lockdowns caused a labour scarcity, which hampered harvesting and post-harvesting activities and resulted in agricultural losses.<\/li>\n<li>Furthermore, the lockdowns hampered the transfer of agricultural inputs such as seeds, fertilizers, and pesticides, resulting in planting delays and lower yields.<\/li>\n<li>The pandemic also had an influence on farmer credit availability. Because of the uncertain economic situation, many financial institutions were hesitant to lend to farmers.<\/li>\n<li>Farmers were unable to invest in their crops due to a shortage of finance, resulting in lower yields and income.<\/li>\n<li>The administration has taken many initiatives to solve the country&#8217;s agrarian suffering.<\/li>\n<li>The government unveiled a 1.7 lakh crore rupee ($22.6 billion) rescue package for farmers, which included measures such as an increase in farmer credit limits and a three-month interest-free loan.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><\/h2>\n<h2>Agriculture Distress: Steps taken<\/h2>\n<ul>\n<li><strong>Minimum Support Price (MSP):<\/strong>\n<ul>\n<li>Each year, the government announces MSPs for various crops to guarantee that farmers receive a fair price for their produce.<\/li>\n<li>This gives the market a price floor and protects farmers from market swings.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Crop and livestock Insurance:<\/strong>\n<ul>\n<li>The government has implemented several crop insurance policies such as <strong>Pradhan Mantri Fasal Bima Yojana\u00a0(PMFBY),<\/strong><strong>Livestock insurance Scheme<\/strong>,<strong>Weather based Crop Insurance Scheme (WBCIS).<\/strong><\/li>\n<li>They protect farmers from crop losses caused by natural disasters, pest attacks, and other reasons.<\/li>\n<li>These programmes provide financial assistance to farmers in the event of crop loss, lowering their risk and susceptibility.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Agricultural Credit:<\/strong>\n<ul>\n<li>The government lends money to farmers through various programmes, such as the <strong>Kisan Credit Card<\/strong>, to guarantee that they have access to credit at fair rates.<\/li>\n<li>Crop production, farm mechanisation, and other connected activities are eligible for credit.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Irrigation Facilities:<\/strong>\n<ul>\n<li>To increase irrigation facilities in the country, the government has developed many initiatives, such as the <strong>Pradhan Mantri Krishi Sinchai Yojana<\/strong>, which aims to ensure water availability in every farm field.<\/li>\n<li>This enables farmers to boost crop output while decreasing their reliance on rain-fed agriculture.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<table style=\"width: 99.7936%;\">\n<tbody>\n<tr>\n<td style=\"width: 100%;\" width=\"641\"><strong>Micro irrigation fund:<\/strong><\/p>\n<ul>\n<li>As part of its goal to enhance agriculture productivity and farmers&#8217; income, the government established a specific Rs5,000 crore fund to bring additional land area under micro-irrigation.<\/li>\n<li>The fund was established under <strong>NABARD<\/strong>, and it will provide this money to states at a concessional rate of interest to promote micro-irrigation, which now covers just 10 million hectares out of a potential 70 million hectares.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<ul>\n<li><strong>Market Reforms:<\/strong>\n<ul>\n<li>The government has implemented a number of reforms to improve the functioning of agricultural markets and offer farmers with better price discovery.<\/li>\n<li>The <strong>e-NAM platform<\/strong> is an online trading platform for agricultural produce, and the <strong>Agricultural Produce and Livestock Marketing (APLM) Act<\/strong> intends to build a competitive and transparent agricultural produce market system.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Direct Income assistance:<\/strong>\n<ul>\n<li>The government has developed numerous schemes, including <strong>PM-KISAN, DBT transfer, Krushak Assistance for Livelihood and Income Augmentation (KALIA) scheme (Odisha) and Rythu Bandhu (Telangana). <\/strong><\/li>\n<li>They offer farmers with direct income assistance, which helps to supplement their income and alleviate their misery.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Research and Development:<\/strong>\n<ul>\n<li>The government has developed a number of research and development institutions in order to develop new technology, crop types, and farming practices that are more suited to farmerneeds.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<table style=\"width: 98.2591%;\">\n<tbody>\n<tr>\n<td style=\"width: 100%;\" width=\"631\">\n<ul>\n<li>The <strong>National Mission for Sustainable Agriculture (NMSA)<\/strong> was created to increase agricultural output, particularly in rainfed areas, by focusing on integrated farming, water usage efficiency, soil health management, and resource synergy.<\/li>\n<li>The United Nations General Assembly declared 2023 to be the<strong style=\"font-family: inherit; font-size: inherit; background-color: var(--global--color-background); color: var(--global--color-primary);\"> International Year of Millets,<\/strong><span style=\"font-family: inherit; font-size: inherit; background-color: var(--global--color-background); color: var(--global--color-primary);\"> a resolution proposed by India and supported by more than 70 countries. <\/span><\/li>\n<li><span style=\"font-family: inherit; font-size: inherit; background-color: var(--global--color-background); color: var(--global--color-primary);\">The resolution aims to raise public awareness about the health advantages of millets as well as their potential for production under harsh climate change conditions. <\/span><\/li>\n<li><span style=\"font-family: inherit; font-size: inherit; background-color: var(--global--color-background); color: var(--global--color-primary);\">The Ministry of Agriculture and Farmers Welfare would serve as the focal point for the International Year of Millet (IYoM)-2023 celebrations.<\/span><\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2>Agriculture Distress: A way ahead<\/h2>\n<ul>\n<li><strong>Agricultural distress requires a new distress index:<\/strong>\n<ul>\n<li>The government oversimplifies a deeper and multi-layered reality of rural suffering by quantifying it through the number of suicides.<\/li>\n<li>Second, by linking debt-related suicides to financial institutions, the diagnosis clears the way for a simplistic remedy of farm loan waivers, which is not only inefficient but also ineffective in the medium to long run and hence there is need of new distress index.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Agripreneuship:<\/strong>\n<ul>\n<li>Farmers should diversify their crops and shift to horticulture and animal production, which are less volatile in the market.<\/li>\n<li>This will lessen their reliance on a single crop and enhance their revenue.<\/li>\n<\/ul>\n<\/li>\n<li>There should be a <strong>advisory board at the district and state levels<\/strong> to address farmer stress concerns and advise on how to prevent terrible and unfortunate farmer suicides.<\/li>\n<li><strong>Technology<\/strong> can assist in closing &#8216;yield gaps&#8217; and thereby increasing production. Government policies have favoured cereals, particularly rice and wheat. <strong>There is a need to shift policies away from rice and wheat and towards millets, pulses, fruits, vegetables, livestock, and fish.<\/strong><\/li>\n<li>In order to address the issue of small average holding sizes, strategies for land consolidation as well as land development activities are required.<\/li>\n<li>Farmers can join forces willingly to pool land and get the benefits of scale. Farmers can benefit from economies of scale in both input procurement and output marketing by consolidating.<\/li>\n<li>Raising the MSP, price deficiency payments, or income support programmes are just partial solutions to the challenge of providing farmers with remunerative returns.<\/li>\n<li>A long-term solution would be market reforms paired with export-friendly trade policies along with a competitive, stable, and united national market is required for income stability of farmers.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Agriculture distress refers to\u00a0 low crop yields, fluctuating agricultural produce prices, high input costs, indebtedness, and a lack of access to credit experienced by the farmers. Agriculture distress: Causes Declining Average Size of Farm Holdings: The main reason for farm crises is the rising pressure of population on farming and land assets. Government data show&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/agriculture-distress\/\">Continue reading <span class=\"screen-reader-text\">Agriculture distress<\/span><\/a><\/p>\n","protected":false},"author":10341,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-241191","page","type-page","status-publish","hentry","entry"],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/241191","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10341"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=241191"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/241191\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=241191"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}