{"id":41278,"date":"2019-01-29T17:35:00","date_gmt":"2019-01-29T12:05:00","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=41278"},"modified":"2019-01-29T17:35:00","modified_gmt":"2019-01-29T12:05:00","slug":"income-transfer-can-ease-farm-distress","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/income-transfer-can-ease-farm-distress\/","title":{"rendered":"Income transfer can ease farm distress"},"content":{"rendered":"<p><a href=\"https:\/\/www.thehindubusinessline.com\/opinion\/income-transfer-can-ease-farm-distress\/article26113859.ece\"><strong>Income transfer can ease farm distress<\/strong><\/a><\/p>\n<p><strong><u>Issue: <\/u><\/strong><\/p>\n<ul>\n<li>For more than 15 years the <strong>farmers have been struggling to get adequate income<\/strong> mainly due to <strong>increased cost of cultivation and un-remunerative prices in the market<\/strong><\/li>\n<\/ul>\n<p><strong><u>Problems with Loan Waiver (LW) Scheme:<\/u><\/strong><\/p>\n<ul>\n<li>Loan Waiver Scheme <strong>cover less than one-third of total farmers<\/strong> which could be inferred from following studies<\/li>\n<\/ul>\n<ol>\n<li><strong>Rangarajan Committee on Financial Inclusion (2008):<\/strong> observed about 66% of small and marginal farmers rely on moneylenders for credit need<\/li>\n<\/ol>\n<p>2.<strong>Situation Assessment Survey of Farmers (2013-13)<\/strong>&#8211; conducted across country by <strong>NSSO<\/strong>:\u00a0 observed only 23% of farmers borrowed money from institutional sources<\/p>\n<p>3.\u00a0<strong>NABARD-All India Rural Financial Inclusion Survey in India (2016-17):<\/strong> observed only 30.3 per cent of \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 farmers have taken loans from institutional agencies<\/p>\n<ol start=\"4\">\n<li><strong>All India Debt and Investment Survey (2013): <\/strong>observed share of non-institutional debt accounts for 36% cultivators<\/li>\n<\/ol>\n<ul>\n<li>Between 2014-18 about 182802 crore loan was waived by seven states but there is <strong>no evidence to show Loan Waiver scheme improved livelihoods of farmers<\/strong><\/li>\n<li><strong>Erode credit discipline and credit culture<\/strong><\/li>\n<li><strong>Cost tax payers<\/strong>. For Eg. about 52260 crores was spent on the loan waiver of 2008 (International Council for Research on International Economic Relations)<\/li>\n<li>Entail a <strong>moral hazard<\/strong> \u2014 even those who can afford to pay may not pay in the expectation of a waiver<\/li>\n<\/ul>\n<p><strong><u>Benefits of Direct Income Transfer(DIT) Scheme:<\/u><\/strong><\/p>\n<ul>\n<li><strong>Benefit all farmers<\/strong>: those who have borrowed from institutional as well as non-institutional sources<\/li>\n<li><strong>Timely Farm Inputs application<\/strong>: income transfer is done before cropping season, farmers can avail essential inputs without dependence on moneylenders and traders<\/li>\n<li><strong>Reduce cost of cultivation<\/strong>: which is mainly high due to high cost of loans by moneylenders and traders<\/li>\n<li><strong>Reduce Distress sale:<\/strong> farmers who borrowed from moneylenders and traders, no longer forced to immediate sell after harvest to pay back<\/li>\n<li><strong>DIT frees the farmers from interactions with bankers<\/strong><\/li>\n<li>In Loan Waiver scheme <strong>non-defaulting farmers<\/strong> do not get any benefit as no such issue in DIT-S<\/li>\n<\/ul>\n<p><strong><u>Issues in implementation of DIT-Scheme:<\/u><\/strong><\/p>\n<ul>\n<li><strong>Telangana successful Rythu Bandhu Scheme<\/strong> provides 8000\/acre a year<\/li>\n<li>Based on this model, the <strong>financial cost of DIT scheme would be<\/strong> :<\/li>\n<\/ul>\n<p><strong>India&#8217;s current net cultivated area: around 140mn hectares <\/strong><\/p>\n<p>Following Rythu Bandhu scheme if government pays say: 20000\/acre a year<\/p>\n<p>Financial cost would be: <strong>about 2.80 lakh crore per year<\/strong><\/p>\n<p>It would be huge amount for single budgetary scheme<\/p>\n<p><strong><u>Probable Solution to DIT :<\/u><\/strong><\/p>\n<ul>\n<li>Such huge financial cost can be reduced significantly by marginally tweaking the scheme:<\/li>\n<\/ul>\n<ol>\n<li>By <strong>fixing ceiling limit of 40000\/farmer<\/strong>: all marginal and small farmers (86% of total farmers) would benefits from scheme and other farmers gets ceiling amount<\/li>\n<li>By <strong>employing center-state cost sharing mechanism<\/strong> of say 70:30 as in other developmental scheme<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"<p>Income transfer can ease farm distress Issue: For more than 15 years the farmers have been struggling to get adequate income mainly due to increased cost of cultivation and un-remunerative prices in the market Problems with Loan Waiver (LW) Scheme: Loan Waiver Scheme cover less than one-third of total farmers which could be inferred from&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/income-transfer-can-ease-farm-distress\/\">Continue reading <span class=\"screen-reader-text\">Income transfer can ease farm distress<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[9],"tags":[],"class_list":["post-41278","post","type-post","status-publish","format-standard","hentry","category-public","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704688360},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/41278","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=41278"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/41278\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=41278"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=41278"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=41278"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}