Adapted from the Times Of India p.9 13 December 2018 and other sources.

1. INDIAN FARMERS IN DISTRESS
10 REASONS
ADAPTED FROM THE TIMES OF INDIA P.9 13 DECEMBER 2018
TD 602
AUTUMN 2019

2. 1. Two successive drought years – 2014, 15
Government has allocated
significant funds for the
sector
BUT
Slow implementation of
projects has not eased the
pain. Drought in
Maharashtra, Gujarat and
Karnataka have also added
to farmers’ woes. 2

3. 2. Collapsing farm prices
3
• Low international price – exports
are hit
• Depression of domestic prices due
to imports
• Government delayed imposing
tariffs on imports
• Non realisation of remunerative
prices for farmers due to limitation
of MSP
• An agri marketing system that
delivers only a small fraction of the
final price to the actual farmer.

4. 3. Failure of crop insurance scheme
4
• PMFBY launched in 2016 to
provide insurance and financial
support to farmers in the event of
failure of any crops due to natural
calamities, pests and diseases
• Also meant to stabilise the income
of farmers and ensure they remain
in farming
• Scheme has seen lower enrolments
due to a string of factors, including
high premiums and lack of
innovation by insurance firms. Source: Financial Express

5. 4. Hiatus in irrigation projects
5
• Limited progress in the 99 large
irrigation projects under the INR
40,000 crore Long Term Irrigation
Fund of the centre launched
through NABARD
• Bureaucratic delays and slow
implementation by states, have
apparently hurt progress
Source: Down To Earth

6. 5. Marketing is ignored
• Farm sector development ignored potential for marketing – NITI Aayog
• Archaic laws still in place
• Reforms to the APMC Act have been slow
• Combination of market regulations and infrastructure deficiencies leads to a
price depressing effect on the sector – OECD
• Experts suggest for a joint centre-state entity like the GST council to jointly
take decision
6

7. 6. Missing modern technology
7
• No real technological
breakthrough in recent times –
NITI Aayog
• Tech in seeds, farm
implements could boost
productivity
Source: openpr.com

8. 7. Fragmented supply chains
8Source: Mukul Sarkar, EXIM Bank (2007)
• Large gaps in storage, cold chains
• Limited connectivity
• Significant post-harvest losses of
fruits and vegetables: 4-16% of
total output

9. 8. Lack of food processing clusters
9
Source:TheHinduBusinessLine(2017)
• Lack of clusters implies little incentive for
farm diversification
• Share of high value sectors (fruit, vegetable
and meat) are low (5% and 8% of total value
of output) in food processing
• Cereal based and oilseeds occupy 21% and
18% respectively

10. 9. Delayed FCI reforms
10
• Handover procurement of rice and wheat
to states with sufficient experience and
infrastructure
• Give direct cash subsidy to farmers
(@INR7000/ha) and deregulate fertilizer
sector
• These and other recommendations of a
govt. appointed panel went into deaf ears Source: The Hindu

11. 10. Low productivity
11
• Operational holding in India
• 85% - < 2 ha and constitutes 45% of total cropped
area
• 5% - > 4 ha
• Productivity lags behind countries like China, Thailand,
Vietnam
• Wheat – Rice yields ~ 1/3rd the global highest
• Mango, Onion, Banana, Potato - ~ ½ to 1/7th the global
highest
Source:
EconomicsDiscussions.net

12. Farmers Distress and Recent State Elections
12
Growth in Agriculture Sector vs Manufacturing sector

13. 13

14. 14

15. 15