[Answered] “Farm sector is stuck in a situation of low income trap from a long time.” Discuss.

Demand of the question
Introduction. Contextual Introduction.
Body. Issue of low income of farmers. Solutions to remove these issues.
Conclusion. Way forward.

Most of Indian policy in response to agrarian distress is based on providing subsidy or post failure reliefs in term if loan waivers. Due to continued failure and acute agrarian distress farmers face continued debt and low income trap. Low income trap is a condition in which farmers are mired in continuous cycle of low income and debts.

Issue of low income of farmers:

  1. Measures such as loan waivers, free or subsidised fertilisers, water, seeds and electricity, which many state governments have resorted to in the past do not help poor farmers to overcome their financial problems on a permanent basis.
  2. In India, farmers are poor due to low productivity (yield per hectare) of all major crops.
  3. The recent government policies like neem coated urea have led to distortions in prices and hence in the use of nutrients. This led to burden on farmers.
  4. The rising  input costs has put enormous pressure on Indian farmers especially small scale farmers.
  5. Lack of formal bank loans to most farmers, especially the small marginalised landholders and tenant farmers led to farmers exploitation in the hands of money lenders, thereby leading huge debt on farmers.
  6. Falling MSPs, leakage and wastage in transit, fluctuating prices because of global imports-exports, lack of cold storage and adequate food processing, etc. has only increases the cost of agriculture and low income profits to farmers.
  7. Decreasing size of farm lands with successive generations, global warming leading to uncertain weather, sustained drought in over two-thirds of rain-fed agriculture lands, power scarcity has reduced production and hence low income.

How farmer’s income can be raised?

  1. Government’s policy of integrated nutrient management to increase productivity should be implemented effectively.
  2. Efforts are needed to bring more and more cultivable area under micro-irrigation (drip/sprinkler irrigation), which would greatly reduce consumption of water while increasing productivity.
  3. Agricultural extension services need strengthening, to impart new scientific knowledge to farmers. This should be facilitated through noted NGOs and companies in agro-business.
  4. Each district should have 2-3 centres where farmers can meet and exchange knowledge on matters of crop insurance, banking and supply of inputs etc. These centres should assist them to integrate with eNAM for getting better price of their produce.
  5. We need to create centres of excellence in our agricultural universities for preparing region-wise strategies to raise crop yield.
  6. The report of the Swaminathan committee on Doubling of Farmers’ Income, need to be implemented expeditiously.

Farmers are in low income trap and need policy measures. Linking procurement to minimum wage, general inflation and the overall quality of living index, and freeing the farmer of loan and investment burdens, will enable elimination of agrarian distress. These measures will help achieve this faster than all the well-intentioned government policies supposed to benefit the farmers all these years.

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