Farmers are often forced to take additional loans to service current loans. Juggling a large number of standing loans can take a toll on their overall well-being.
This is part one of a two-part series exploring the phenomenon of farmers’ indebtedness in India
The Indian farmer is marching again. In March of this year, she walked to Mumbai; now she, along with more than 100,000 of her fellow-farmers, is on her way to Delhi; all in the hope that she can place her concerns in front of political leaders and the wider citizenry. One of the key demands in the charter drafted by the Nation for Farmers on the occasion of the Kisan Mukthi march, is that the “credit crisis and exploding rural indebtedness” be discussed as part of a special session of parliament, on ‘agrarian crisis’.
Indeed, indebtedness has been at the heart of every major farmers’ movement that India has witnessed, both in colonial and post-colonial times. Whether it is the Deccan Riots of 1875 or the Telangana Struggle of 1949-51, or the more recent KisanLong March earlier this year and the upcoming Chalo Dilli, the problem of indebtedness has been at the root of farmers’ angst, and relief from it one of their key demands. Defining indebtedness
So, what is farmers’ indebtedness? Who among the farmers is more likely to be indebted? These are the questions that I address in my two-part essay. I use data from the All India Debt and Investment Survey for the years 1992, 2003, and 2013, collected by National Sample Survey Office (NSSO) to look at these dimensions of farmers’ indebtedness.
Indebtedness has been described as impoverishment by debt (Guerin, I et.al, 2013), or as a situation where a household is caught in spiral debts (Taylor M, 2011). Taylor further described it as a situation where there are a large number of standing loans, a high rate of interest, and no real hope of clearing the principal amount.
Scholars have measured indebtedness in a wide variety of ways. Some have used a self-reported sense of being indebted, using indicators like attitudes towards earning, saving, and spending money while others have looked at the frequency of taking loans and participation in debt markets. Yet others have looked at the extent to which households sacrificed basic needs, witnessed a dilution of their economic coping strategies and an erosion in the households’ ability to live with honour.
Also read: For the Third Time in Three Months, Farmers to Protest in Delhi
The NSSO looks at indebtedness along three axes; the number of standing loans, the average amount outstanding at the time of survey, and the ratio of the total amount outstanding to the total value of assets (called debt-to-asset ratio or DAR). In this part of the essay, I focus on the standing loans. Survey findings
How many farmer households have a standing loan or uncleared loans? According to the data from AIDIS, more than 70% of the rural population has one or more standing loans. Nearly 74% of the farmer households were in debt in 2013, as opposed to 64% of the non-farmer households. Since 1993, the percentage of farmer households in debt has increased by more than 12 percentage points. Prima facie, a higher proportion of large farmers are in debt, than those with marginal and small landholdings; similarly, a higher proportion of farmer households in the top quintile are in debt when compared to those in the lower quintiles.
Digging deeper into the data reveals a more nuanced story. I find that caste is an important determinant of whether a household has standing loans or not. For instance, a household from the Scheduled Caste (SC) community is more likely to have a standing loan than those in the general category, as is a household belonging to the other backward caste (OBC).
Percentage of Farmers Indebted. Source: NSSO 1992, 2003 & 2013. All figures are percentages. Source: NSSO 1992, 2003, and 2013
A farmer household in 2013 is 22 percentage points more likely to have a standing loan than a farmer in 1992. Thus, the likelihood of a farmer being in debt has been increasing over the past two decades. Among the states, farmers from Andhra Pradesh, Telangana, Punjab, Kerala, Maharashtra, Karnataka, Tamil Nadu, and West Bengal are more likely to have a standing loan than those in other parts of the country.
Having a standing loan is only a small sliver of the story. In order to better gauge indebtedness, we need to look at the number of standing loans that a farmer household has. On an average, in 2013, a farmer household was likely to have 20 percentage points higher number of standing loans than a non-farming household. Among farmers, SC households had a higher number of standing loans than a household from the general category. More significantly, a farming household in 2013 would have had 132 percentage points more standing loans than a farming household in 1992; a clear indication that the proclivity to borrow has increased significantly over the past two decades.
Among the states, farmers from Andhra Pradesh, Telangana, Punjab, Tamil Nadu, Kerala, and West Bengal are likely to have a higher number of standing loans than the farmers elsewhere. It seems to be more than a coincidence that farmers from some of these states are participating in large numbers in the various movements and struggles that we are witnessing today.
This is a hard question to answer for it can vary from person to person. For instance, a salaried employee may be able to service two to three loans comfortably. But for a small farmer to service even two loans might be very difficult. What these numbers suggest is a higher dependence on loans among farmers.
During June-July 2018, I visited a few villages in Sangareddy district, Telangana, and Anantapur, Andhra Pradesh to take stock for my dissertation, and had an opportunity to interact with a few farmers. What came across through those conversations was the sheer everydayness of loans in their lives. Whether it be because the bank was taking its time disbursing the loan or because someone at home got ill or because the household had to host a large number of guests and they had run out of ready cash, debt stepped in to address each of these situations, and more.
Mean number of Standing Loans. Source: NSSO 1992, 2003 & 2013
One farmer I spoke to mentioned that although he had a particularly good crop that season, because the middleman who sold his produce at the market took long to return with the proceeds, he lacked access to money for the next cropping season; and so he had to borrow. Another thing that transpired during my interactions with farmers, something that is widely acknowledged today, is how farmers are forced to take additional loans to service current loans. As one farmer in Sangareddy mentioned, if a lender gets too restive, the borrower simply takes money from another lender and repays the former.
Done repeatedly, juggling a large number of standing loans can take a toll on the overall well-being of farmer. The number of standing loans does not, however, fully explain the sense of despair due to indebtedness among farmers. In the second part of my essay, I look at the debt-to-asset ratio to understand the extent of indebtedness.
Sandeep Kandikuppa is a Doctoral student at the University of North Carolina, Chapel Hill.
Providing income security to farmers and boosting investment in agriculture are the two things that are needed to help Indian farmers in distress, said noted agricultural economist Ashok Gulati on Monday.
“While there can’t be two opinions about the farmers’ plight in our country, increasing minimum support price (MSP) cannot be the solution. We may have to bring in science and our understanding to solve their problem,” Gulati said while participating in a panel discussion on a newly-released book, Farmers under Modi Raj: Double Income or Double Jeopardy, written by political scientist and social activist Yogendra Yadav and others.
The maximum of “higher the cost, higher the MSP” will only make farming an outlier, said Gulati, who is the Infosys Chair of Agriculture at the Indian Council for Research on International Economic Relations.
“If 50 per cent more than the C2 cost of produce (comprehensive cost, including the imputed cost of land rent) is given as floor price for all 23 commodities under MSP, there will be a crisis in the country,” he said, adding that on average the price differential between A2 + family labour (used for calculating MSP currently) and C2 is about 38 per cent.
According to Gulati, providing income support to farmers would be a better option than giving price support as it would not adversely impact the market. China, for instance, gave away $22 billion as income support to farmers on the basis of land the farmers owned, he said, adding that India could emulate the model.
Apart from global commodity prices, which are down 25 per cent from their peak in 2014, India’s pro-consumer policies and total disconnect of its trade policies are factors keeping prices of agri produce depressed. It is high time governments stopped distributing rice and wheat at ₹1 or 2 a kilo. This will automatically improve the conditions of Indian farmers, Gulati said.
Citing a study that ICRIER carried out, the noted agricultural economist said that even though India doesn’t tax agriculture, Indian farmers ended up paying 14 per cent tax on gross farm receipts in the last 17 years.
Earlier, opening the discussion on his book, Yadav said the current regime under Narendra Modi was the worst anti-farmer government that India has seen. Not only are its vision and deeds anti-farmer, even policy changes that it has been making have been putting farmers into more and more distress, Yadav said.
“Helping farmers in times of distress caused by natural disasters has been a tradition of all democratically elected governments at the Centre. The Narendra Modi government, on the contrary, told the court that it was not its responsibility but that of State governments’,” he said.
Gulati, however, disagreed with Yadav and said the NDA government was not anti-farmer by design. Though it had initiated some measures which it thought would benefit farmers, it didn’t have systems in place to implement them, he said. In the last one or two years, it took steps to have a relook on these initiatives, Gulati added.
Summery of agriculture-related recommendations for NITI Aayog’s “Strategy for New India @75” report:
– Improve yields – close the yield gap between India and best performing countries
– Increase area under fruit and vegetables cultivation for the benefit of small and marginal farmers
– “ Agricultural research in the country is constrained by resource inadequacy, regulations and intellectual property rights (IPR)”
– Increase area under irrigation through micro-irrigation
– Subsidy support for P and K fertiliser to fix NPK imbalance
– Make farmers ‘agriprenuers’ by replacing the existing agri produce marketing committee act with an expanded NAM
– promote synergy between Agriculture Technology Management Agency (ATMA) and Krishi Vigyan Kendras (KVKs) – push for PPP partnership in KVKs
– All extension should be market led and “value added” (reduce post-harvest losses)
– promote private investment in agriculture, improve opportunities for agri-business, there is need for corporate investment in agri-infrastructure
– Adopt the Model Agricultural Produce and Livestock Marketing Act (APLM) of 2017, update the essential commodities act
– replace CACP with an agricultural tribunal – replace MSP with a “minimum reservce price”, which should be starting price for auctions at mandis
– Separate the criteria for MSPs for (i)surplus produce; (ii) for deficit but globally available products; and (iii) for products that are in deficit both domestically and globally.
– have an “agricultural advisory service” like the US and EU to ensure farmers adopt an optimal cropping pattern to maximize income …
– basically MSP is a partial short-term solution so the long-term trade regime should be favourable to ensure better prices for farmers.
– promote FPOs and credit through JLGs
– use land-leasing act to allow small farmers to access land (through formal tenancy)
– Improve rural infrastructure: roads, cold storage, village level procuement centers, food processing, werehouses, “block level resource centres” for creating value chains targeting “clusters of villages”
Summary: Promote agri-business (small and large), reform policy (for tenancy, contract farming, marketing), improve infrastructure and supply chain, improve extension services to enable better price recognition, promote organic farming and also move farmers into manufacturing to supplement income
Divya Veluguri
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The cost of land degradation can be substantial for India where agriculture is a large contributor to the country’s Gross Domestic Product.
Dry land around the Narmada Dam area is pictured in Kewadiya Colony, near Rajpipla in western Gujarat state | Sam Panthaky/AFP
Land degradation can exacerbate climate change and threaten agricultural productivity, water quality, biodiversity, sustainable development, and the living conditions of humans and wildlife, among other effects. Globally, a third of our land is degraded, affecting three billion people, and it is expected to worsen with rising demand for food.
As a signatory to the United Nations Convention to Combat Desertification, India is committed to reducing its land degradation and desertification. In fact, India’s goal is to achieve land degradation neutral status by 2030 whereby increases in land degradation would be offset by gains in land reclamation
To address this issue, ISRO’s Space Applications Centre in Ahmedabad had released the results of a project in 2016 in the form of an Atlas mapping the extent of land degradation and desertification across the country, including the processes involved, the severity, and the changes in degradation. Not only does this Atlas facilitate India’s reporting to the United Nations Convention to Combat Desertification, it also highlights vulnerable areas for mitigation to policy makers, managers, planners, and researchers.
The report-cum-atlas showed that during 2011-2013, the most recent time period to be quantified, 29.3% of the country was undergoing land degradation. Compared with 2003-2005, the country experienced a 0.57% increase in land degradation and more land has been degraded than reclaimed. A few states were afflicted with more than 50% of their area under desertification. The increase in degradation compared with 2003-2005, was high for Delhi, Himachal Pradesh, and the northeastern states while four states showed a drop in degradation.
Better regulation of lands and stepping up watershed management initiatives will help combat the rising trend of degradation, experts say.
What is land degradation?
According to the United Nations Convention to Combat Desertification, land degradation is the “reduction or loss of biological or economic productivity..resulting from land uses or from a process or combination of processes, including…human activities.” When land degradation occurs in dryland areas, more specifically arid, semi-arid and dry sub-humid areas, it is referred to as desertification. Around 69% of India falls under drylands.
Land degradation within dryland regions is known as desertification. The map shows the dryland regions of India, which comprise 69%. Original source: National Bureau of Soil Survey and Land Use Planning, Bangalore. Credit: Map extracted fromDesertification and Land Degradation Atlas of India.
“The universal definition is the processes of land degradation that varies with the time and space,” explained Milap Sharma, a professor at the Centre for the Study of Regional Development at Jawaharlal Nehru University, New Delhi, who was part of the project. “The basic definition of land degradation which we used to prepare the Atlas is deterioration of the original quality of land and deterioration or total loss of the production capacity of the soil.”
Land degradation is driven by both by changes in climate or human activities. S Dharumarajan, a scientist at the Indian Council of Agricultural Research-National Bureau of Soil Survey and Land Use Planning in Bengaluru, who was involved in the project, pointed out. “Overexploitation of natural resources is the main reason for increasing land degradation in India,” he said.
Absence of soil and water conservation measures in Muttala, Anantapur district Andhra Pradesh leads to desert. Photo credit: S. Dharumarajan
The cost of land degradation can be substantial for India where agriculture is a large contributor to the country’s Gross Domestic Product. As a result, lost productivity can weigh heavily on the economy. A study by Delhi-based The Energy and Resources Institute or TERI estimated that the economic losses from land degradation and change of land use in 2014-’15 stood at 2.54% of India’s GDP or Rs 3,177.39 billion (Rs 317,739 crore or $46.9 billion) for that year. Land degradation alone accounted for 82% of those costs.
Mapping degradation
ISRO’s Atlas maps degradation and desertification from Indian Remote Sensing Satellite Advanced Wide Field Sensor or AWiFS data at a scale of 1:500,000 during 2003-2005 and 2011-2013 for all Indian states including the processes of degradation (ie water erosion, wind erosion, etc), their severity levels, and the changes between the two time frames – a period of eight years.
Funded by the Ministry of Environment, Forest and Climate Change and led by ISRO’s Space Applications Centre, the project involved a team of almost 100 scientists and staff members from 19 state government departments and academic institutes throughout the country.
The Atlas classifies the type of land cover, which included forest or plantation, agriculture, grassland, scrubland, barren, rocky area, sandy area, glacial, periglacial, and others. In addition, ground truthing or field observations were performed to ascertain that the satellite images were consistent with features on the ground.
In the Atlas, the processes of degradation/desertification are listed as vegetation degradation from deforestation, forest-blanks, shifting cultivation and grazing or grassland; water erosion resulting in the loss of soil cover mainly due to rainfall and surface runoff water; wind erosion causing the spread of sand which can erode soil; salinity of soils in cultivated areas due to excess evapotranspiration, drought, excess irrigation, and overuse of fertilisers; waterlogging or the accumulation of standing water for long periods caused by floods, excess irrigation, and incorrect planning of drainage; frost shattering referring to the breakdown of rocks because of differences in temperature; frost heaving where ice lens form under the soil; mass movement delineating the movement of masses of soil and rock due to gravity; and manmade causes such as mining, quarrying, brick kilns, industrial effluents, city waste, and urban agglomeration. These are further classified into their level of severity, either high or low.
Soils are eroding faster than its formation – Area affected by water erosion in Chamarajanagar district, Karnataka. Photo credit: S. Dharumarajan
Increase in degradation and desertification India-wide
In 2011-2013, India’s land degradation area totaled 29.3% of India’s total land area, representing an area of 96.4 million hectares. This is an increase of 0.57% compared with 2003-2005, which amounts to 1.87 mha – an area larger than the state of Nagaland. Although 1.95 mha of land was reclaimed or restored between 2003-2005 and 2011-2013, 3.63 mha of productive land degraded during this period.
“Land reclamation is bringing back the degraded land into its former state by adopting suitable management practices,” explained Dharumarajan.
Changes in the desertification and land degradation status between 2003-2005 and 2011-2013. More land has been lost than reclaimed. Credit: Chart from ISRO’sDesertification and Land Degradation Atlas of India
The top processes leading to degradation/desertification in the country in both time periods were water erosion (10.98% in 2011-2013) followed by vegetation degradation (8.91%) and wind erosion (5.55%). Overall, the areas affected by vegetation and water erosion increased by 1.02 mha and 0.49 mha respectively in 2011-2013, while there was a slight drop in the total area degraded due to wind erosion and salinity, indicating improvement.
Chart shows the changes in the processes leading to desertification/land degradation between 2003-2005 and 2011-2013. Credit: Chart from ISRO’sDesertification and Land Degradation Atlas of India.
The area under desertification (dryland areas) was 82.64 mha in 2011-2013, which rose by 1.16 mha from 2003-2005. While wind erosion was the main process leading to desertification in the arid regions, vegetation degradation and water erosion dominated in the semi-arid and dry sub-humid regions.
Land degradation increased in most states
In terms of India’s total geographical area, the states of Rajasthan, Gujarat, Maharashtra, Jammu and Kashmir, and Karnataka have the highest area of lands undergoing degradation/desertification, amounting to 18.4% (out of India’s total 29.3%) while all the other states each had less than 2% of degraded lands.
Comparison of the changes in desertification/land degradation status between 2003-2005 and 2011-2013 as a percentage of the country area. Credit: Chart from ISRO’sDesertification and Land Degradation Atlas of India.
But when considering the area within the states, Jharkhand followed by Rajasthan, Delhi, Gujarat, and Goa, had the highest area of degraded lands, representing more than 50% of their area. In comparison, the land area undergoing degradation/desertification in Kerala, Assam, Mizoram, Haryana, Bihar, Uttar Pradesh, Punjab, and Arunachal Pradesh was less than 10%.
Sharma explained that Rajasthan and Gujarat are large states with desert regions featuring an arid climate while “Delhi and Goa are comparatively smaller states, but overexploitation leads to a higher area under desertification.”
Overall, land degradation/desertification in 87% of 30 states increased from 2003-2005 to 2011-2013. Four states, however, improved slightly in their degradation status over the eight-year period. Among these, Uttar Pradesh had the highest restoration of 1.27%, mainly due to a drop in salinity, while the other three – Rajasthan, Odisha, and Telangana – improved by less than 1%.
Map: Kartik Chandramouli/Mongabay. Source: Desertification and Land Degradation Atlas of India (SAC, ISRO)
Delhi had the third highest level of desertification (60.60% of the state) in the country and it also experienced the highest increase in land degradation (+11.03% ) over the eight-year period from 2003-2005. “In the case of Delhi it is not strictly desertification, but prime land degradation arising from settlement growth, which turns productive areas into non-productive ones,” explained Sharma.
Desertification in the northern states such as Himachal Pradesh (+4.55%) and Jammu & Kashmir (+1.94% ) rose more compared with the eastern states such as Bihar and West Bengal both of which experienced an increase of less than 1% in land degradation. According to Sharma, the “harsh climate and hilly terrains in Himachal Pradesh and Jammu & Kashmir are dominated by physical processes” such as slope erosion, mass-movement, and frost shattering.
The northeast part of the country had notably large increases in land degradation over the eight years from 2003-2005. Land degradation in the states of Nagaland, Tripura, and Mizoram shot up by 8.71%, 10.47%, and 4.34% respectively. In fact, Tripura and Nagaland had the second and third highest increase in degradation country-wide. The driving force for the sharp rise in these states was mainly because of a surge in vegetal degradation of forests.
This may be linked to “low or lack of watershed management interventions in the region from the beginning,” said V Ratna Reddy, Director of Livelihoods and Natural Resource Management Institute who was the author of a 2003 article on land degradation in India.
In contrast to the north and northeast, degradation/desertification in the southern states rose by less than 1% from 2003-2005 to 2011-2013. Dharumarajan explains that “unlike the northern states like Rajasthan or Gujarat” that feature arid climates, “southern states are mostly under semi-arid and dry sub-humid regions where the land degradation process is low.” But he warns that recently “due to overexploitation of land resources and mismanagement, desertification/land degradation processes in the southern states are growing at a faster rate.”
Stunted crop growth due to high salinity in Chamarajanagar district.Photo credit: S. Dharumarajan.
Among the southern states, Telangana showed an improvement in the area undergoing degradation/desertification by 0.52%. This is mainly because of a drop in the area of un-irrigated agricultural lands featuring low severity of water erosion, which is influenced by land management practices, says Dharumarajan. “But the main problem in Telangana is increasing salinity which is due to bringing non-conventional areas into irrigated agriculture,” he adds. Varying degradation estimates and definitions
Surinder S. Kukal, a professor and dean of the College of Agriculture at Punjab Agricultural University, Ludhiana, said that the current estimation of land degradation at 29.3% is much lower compared with an earlier 1994 estimate of 57% by the National Bureau of Soil Survey and Land Use Planning.
This variation, according to Dharumarajan, arises due to differences in methodologies and definitions. The earlier estimate was likely based on extrapolation of sample surveys but the most recent figure is based on high-resolution remote sensing data, he points out.
Kukal has some concerns about the classification of the processes of degradation. He points out that the process of vegetation degradation leads to water and wind erosion. In other words, “the water and wind erosion are the outcomes of vegetation depletion.” And, although manmade degradation is stated separately in the Atlas, he believes that most land degradation is manmade.
Rampant salinity and alkalinity in tank and canal irrigated areas. Development of salinity and alkalinity in Bukkarayasamudhrum, Anantapur district. Photo credit: S. Dharumarajan.
“It all started when nomad humans started animal and crop husbandry by destroying natural vegetation to pave the way for present-day agricultural lands,” he stated. The best example, he says, is the practice of shifting cultivation in the northeast. Man-made degradation continues until today, he asserts, with agricultural lands being converted into settlements, industries, and highways.
“The impact of land degradation varies with time and space. It depends on the intensity and amount of rains which cause soil erosion by water,” Kukal says. “The increase/decrease in area under land degradation does not matter anymore because of the severity of various components of land degradation. The mudslides in Jammu & Kashmir (Ladakh) and Uttarakhand during the last few years are sufficient to remind us that things are going from bad to worse every year,” he said.
One of the reasons for the mudslides, explained Kukal, is “deforestation in the catchment areas of many natural and manmade reservoirs,” which “has led to their decreased capacity to hold water in them due to unabated soil erosion by water in the catchment areas.”
Reclaiming degraded lands
So what needs to be done to reclaim degraded lands?
According to Reddy, to combat soil loss by water erosion, which is the largest process leading to land degradation in India, and to restore degraded lands, there is a need to initiate watershed interventions immediately. Watershed management initiatives include afforestation and other programmes aimed at conserving soil and water.
“Watershed management has been dropped from the priority of natural resource management initiatives over the past five years at the national and state levels,” Reddy noted. “This is not a good sign for NRM [natural resource management], given that water erosion is on the rise. Systematic implementation of watershed interventions should be a long-term priority in order to check soil erosion, improve soil moisture, increase recharge, stabilise river basins (catchments) and making agriculture and communities climate resilient.”
Indeed, “watershed management programmes have greatly helped restore degraded lands in Himachal Pradesh,” noted Sharma, citing a case where the state forest department along with the panchayat-level watershed development group planted trees in vulnerable areas, which have resulted in large positive changes over the past two to three decades.
According to Dharumarajan, reducing the severity of degradation/desertification can be achieved by establishing a “proper land use policy, protection of prime agricultural lands and regular monitoring of highly vulnerable areas.”
Kukal also stressed the importance of implementing a strict “land use change policy” at the state level. “Anybody can convert agricultural land into a settlement colony, anybody can install a factory on agricultural land,” he stated, noting that this problem was rampant in Punjab.
In order to reduce soil erosion by water, he proposed harvesting of rain/runoff water – a watershed management practice – stressing that “this needs to be a part of our policy both in urban as well as rural areas.”
“The harvested water could be stored in reservoirs at the individual or community level or used for recharging the groundwater depending on the situation. Every household needs to be sensitised for rooftop rainwater harvesting. The best example of this is Junagarh area of Gujarat, where even the small houses have rainwater harvesting reservoirs, the water of which is used for all household chores including drinking purposes,” he elaborates.
The period of time required to reclaim degraded lands can be lengthy. “If restoration work is scientifically initiated and properly executed, it will take approximately 25-30 years for a visible restoration. But in some areas such as housing colonies may not be possible to restore within such time limits,” said Sharma.
“This Atlas was prepared using visual image interpretation that may vary from eye to eye,” said Sharma. “Therefore, there is some inconsistency in mapping and identification in terms of intensity.”
Also, Dharumarajan points out that the Atlas “only helps for state-level planning.” To prepare a degradation combating plan at the district or village-level, he says, we need to map land degradation at a finer scale.
Around 78 vulnerable districts were selected for detailed mapping at a scale of 1: 50,000, which Dharumarajan says is better for preparing combating plans aimed at afforestation and conserving soil and water. These districts have already been mapped. Semiautomatic techniques were used for mapping the districts, said Sharma. In the next step, such high-resolution mapping and analysis would be carried out for all districts in India, he adds. This article first appeared on Mongabay.
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PM-AASHA will provide MSP assurance to farmers A reflection of Government’s commitment to the “Annadata”
Giving a major boost to the pro-farmer initiatives of the Government and in keeping with its commitment and dedication for the Annadata, the Union Cabinet chaired by Prime Minister Shri Narendra Modi has approved a new Umbrella Scheme “Pradhan Mantri Annadata Aay SanraksHan Abhiyan’ (PM-AASHA). The Scheme is aimed at ensuring remunerative prices to the farmers for their produce as announced in the Union Budget for 2018.
This is an unprecedented step taken by Govt. of India to protect the farmers’ income which is expected to go a long way towards the welfare of farmers. Government has already increased the MSP of kharif crops by following the principle of 1.5 times the cost of production. It is expected that the increase in MSP will be translated to farmer’s income by way of robust procurement mechanism in coordination with the State Governments.
Components of PM-AASHA:
The new Umbrella Scheme includes the mechanism of ensuring remunerative prices to the farmers and is comprised of
Price Support Scheme (PSS),
Price Deficiency Payment Scheme (PDPS)
Pilot of Private Procurement & Stockist Scheme (PPPS).
The other existing schemes of Department of Food and Public Distribution (DFPD) for procurement of paddy, wheat and nutri-cereals/coarse grains and of Ministry of Textile for cotton and jute will be continued for providing MSP to farmers for these crops.
Cabinet has also decided that participation of private sector in procurement operation needs to piloted so that on the basis of learnings the ambit of private participation in procurement operations may be increased. Therefore in addition to PDPS.
It has been decided that for oilseeds, states have the option to roll out Private Procurement Stockist Scheme (PPSS) on pilot basis in selected district/APMC(s) of district involving the participation of private stockiest. The pilot district/selected APMC(s) of district will cover one or more crop of oilseeds for which MSP is notified. Since this is akin to PSS, in that in involves physical procurement of the notified commodity, it shall substitute PSS/PDPS in the pilot districts.
The selected private agency shall procure the commodity at MSP in the notified markets during the notified period from the registered farmers in consonance with the PPSS Guidelines, whenever the prices in the market fall below the notified MSP and whenever authorized by the state/UT government to enter the market and maximum service charges up to 15% of the notified MSP will be payable.
Expenditure:
The Cabinet has decided to give additional government guarantee of Rs.16,550 crore making it Rs. 45,550 crore in total.
In addition to this, budget provision for procurement operations has also been increased and Rs. 15,053 crore is sanctioned for PM-AASHA implementation. The scheme henceforth is a reflection of Government’s commitment and dedication to our ‘Annadata’.
Procurement over the years:
During financial years 2010-14 total procurement was Rs. 3500 crore only whereas during financial years 2014-18, it has risen 10 times and reached to Rs. 34,000 crore. For procurement of these agri-commodities during 2010-14, Government Guarantee of Rs. 2500 crore was provided with expenditure of only Rs. 300 crore; while during 2014-18, Guarantee amount has been increased to Rs. 29,000 crore with expenditure of Rs. 1,000 crore.
Details:
Government of India is working with the holistic approach of solving any issue rather than in fragments. Increasing MSP is not adequate and it is more important that farmers should get full benefit of the announced MSP. For this, government realizes that it is essential that if price of the agriculture produce market is less than MSP, then in that case State Government and Central Government should purchase either at MSP or work in a manner to provide MSP for the farmers through some other mechanism. With this approach, Cabinet has approved the Umbrella Scheme of PM-AASHA with three sub-schemes i.e. Price Support Scheme (PSS), Price Deficiency Payment Scheme (PDPS) and pilot of Private Procurement & Stockist Scheme (PDPS).
In Price Support Scheme (PSS), physical procurement of pulses, oilseeds and Copra will be done by Central Nodal Agencies with proactive role of State governments. It is also decided that in addition to NAFED, Food Cooperation of India (FCI) will take up PSS operations in states /districts. The procurement expenditure and losses due to procurement will be borne by Central Government as per norms.
Under Price Deficiency Payment Scheme this scheme (PDPS), it is proposed to cover all oilseeds for which MSP is notified. In this direct payment of the difference between the MSP and the selling/modal price will be made to pre-registered farmers selling his produce in the notified market yard through a transparent auction process. All payment will be done directly into registered bank account of the farmer. This scheme does not involve any physical procurement of crops as farmers are paid the difference between the MSP price and Sale/modal price on disposal in notified market. The support of central government for PDPS will be given as per norms.
Pro-farmer initiatives of the Government:
The Government is committed to realizing the vision of doubling farmers’ income by 2022. The emphasis is on enhancing productivity, reducing cost of cultivation and strengthening post-harvesting management, including market structure. Several market reforms have been initiated. These include Model Agricultural Produce and Livestock Marketing Act, 2017 and Model Contract Farming and Services Act, 2018. Many States have taken steps to adopt these through legislation.
Efforts are on for a new market architecture, so as to ensure that farmers get remunerative prices on their produce. These include setting up of Gramin Agricultural Markets (GrAMs) so as to promote 22,000 number of retail markets in close proximity of farm gate; competitive and transparent wholesale trade at APMC through eNAM and a robust and pro-farmer export policy.
Besides, several other pro-farmers’ initiatives such as implementation of Pradhan Mantri Fasal Bima Yojana, Pradhan Mantri KrishiSinchai Yojana, ParamparagatKrishi Vikas Yojana and distribution of Soil Health Cards have been undertaken. The commitment for farmer welfare is also reflected by unprecedented decision of announcing minimum support price based on the formula of 1.5 times the cost of cultivation.
Despite Increased Average Income, Farmers’ Debt Remains an Issue
While the average income for a farming household has increased to Rs 8,931, 50% of all households earned less than Rs 5,500 per month and more than 50% households remain indebted.
This is part one of a two-part series that critically analyses NABARD’s financial inclusion survey. Read part two here.
On August 16, the vice-chairman of Niti Aayog released NABARD’s All India Rural Financial Inclusion Survey, appropriately named ‘NAFIS’, which in Urdu means decent. NABARD management has truly acted ‘NAFIS’ by commissioning this detailed survey and then publishing its finding rather quickly. The survey was conducted between January 2017 and June 2017, covering 40,327 households in 245 districts spread across 29 states. The reference period for agriculture related data was from July 1, 2015 to June 30, 2016 (agriculture year, AY, 2015-16).
In its survey, NAFIS includes semi-urban places having a population of up to 50,000. At an all India level, NAFIS sample of households includes 84% rural and 16% urban households. But in several states, semi-urban households had a higher ratio (Kerala 57% and Tamil Nadu 40%). NAFIS defines an agricultural household as one that received value of produce exceeding Rs 5,000 during FY 2016 from agricultural activities. Other households were classified as non-agri households.
The National Sample Survey Office (NSSO), Ministry of Statistics and Programme Implementation, conducted a Situation Assessment Survey of Agricultural Households (SAS) in its 70th round (January – December, 2013). Data was collected from 4,529 villages in 35,200 households and it was published in December 2014 as ‘Key Indicators of Situation of Agricultural Households in India’. Semi urban areas were not included in this survey and an agricultural household was defined as one that had received Rs 3,000 as value of annual agricultural produce.
It is clear that the two surveys are not entirely similar and as compared to SAS, NAFIS may have overstated the income of households because its level of threshold income to be categorised as an agricultural household is 67% higher than under the NSSO survey.
Any sample survey, however, has several limitations as the sample may not correctly reflect the reality of rural population in a complex scenario under which there are wide inter-state and intra-state variations of climate, cropping pattern, farm size, irrigation coverage, literacy, penetration of banks, procurement policies and population density. Thus, out of 97,825 villages in UP, NAFIS has collected data from only 192 villages. We do not know if all the agro-climatic regions in the states were covered. Despite its limitations, the country now has access to an independent source of data not only on farmers income, which is flavour of the season, due to the government’s promise to double farmers’ income by FY 2023, but also on consumption, household savings, investments, indebtedness, micro-finance and even financial knowledge of households. NABARD deserves compliments for this meticulous work
NAFIS finds that the monthly income of agricultural households in AY 2016 was Rs 8,931. As per SAS, average monthly income of an agricultural household in January-December 2013 was Rs 6,426. Based on this data, a government committee on doubling of farm income (Dalwai Committee) calculated that an average agri-household earned Rs 8,059 in 2015-16.
Even though SAS and NAFIS data are not comparable, there is an impressive increase of 39% in nominal income of agri-households between 2012-13 and 2015-16. This is even before the government’s implementation of new schemes of crop insurance (Pradhan Mantri Fasal Bima Yojana), e-NAM, soil health cards, Pradhan Mantri Krishi Sinchai Yojana and announcement of substantial hike in MSPs (in Kharif 2018).
The survey shows that incomes of agriculture households has increased on average. Credit: Well-Bred Kannan (WBK Photography)/Flickr CC BY-NC-ND 2.0
Income data presents a positive outlook
The data of income for states presents an even more positive outlook. In the three-year period, nominal monthly income of agri-households in Bihar increased from Rs 3,558 to Rs 7,175 (an increase of 101.6%) and in West Bengal from Rs 3,980 to Rs 7,756 in WB (increase of 94.9%). However, the income in J&K decreased from Rs 12,683 to Rs 9,355 per month, perhaps due to floods in September-October 2014. It is possible that agri-households in WB, a top performing state under MNREGS, may have earned relatively higher income from wages under the scheme. But Bihar continues to perform poorly under MNREGS and agri-households may have found employment in other states, which may have contributed to such a high increase in three years. In any case, wages under MNREGS in Bihar and WB in 2018-19 are Rs 168 and Rs 191 respectively, while the minimum wage fixed by these states are Rs 237 and Rs 234 respectively.
NAFIS has not provided segregated data of source of income of households for each state. Therefore, the real drivers of high growth in income of farmers in Bihar and WB remain unexplored. To get a fair sense of what is driving the income of agri-households in various states, we may have to wait for the next SAS and NAFIS, which will capture the data for AY 2018-19. One hopes that both the organisations will not change the methodology for collection of data so that actual progress in agriculture and in rural economy can be analysed.
NAFIS also provides information on distribution of households by monthly income. 50% of all households (in rural and semi-urban areas surveyed) earned less than Rs 5,500 per month in 2015-16. This low level of income confirms the impoverishment of rural areas and the urgency of increasing their income from sources other than cultivation of crops. The survey also shows that smaller the size of landholding in the household, larger is the share of income from livestock rearing. With rising incidents of violence against traders of animals, there is every possibility that future surveys of NSSO and NAFIS may show a decline in income from rearing of animals. It is likely to affect small and marginal farmers and landless households more adversely than other households.
This survey, like SAS earlier, confirms that wage labour provided 34% of income of agri-households. In case of marginal farmers, the share of wage labour was more than 40%. In case of non-agri households, 54% of income came from wage labour. It is clear that generating employment in labour intensive sectors like agro industries, construction and textiles is crucial for increasing the income of rural and semi-urban households. The downturn in construction industry would have hit the income of both agri and non-agri households and is likely to reflect in subsequent surveys.
Due to rising incidents of violence against traders of animals, there is a possibility that future surveys may show a decline in income from rearing of animals. Credit: Navaneeth Kishor/Flickr CC BY 2.0
Savings and indebtedness
The NAFIS data on household savings is not only surprising but also reassuring. About 55% of agri-households informed that they had saved money in the previous year. The north-eastern states showed higher level of savings with more than 90% households confirming that they had saved. Surprisingly only 21% households in Punjab and 23% households in Haryana mentioned any savings. It is surprising that the states having highest income are saving the least. It is however heartening that 94% savings are in institutional agencies. Out of annual income of Rs 1.07 lakh, the agri-households saved Rs 9,657 which is a handsome 9% of annual income. Poor households in rural India are thus setting an example for showing a mirror to much better off urban India!
Another important finding of the survey is high level of indebtedness (defined as presence of any outstanding loan). Similar to level of indebtedness in SAS, about half (52.5%) of agri-households confirmed in NAFIS also that they were indebted. The level of indebtedness rose with the size of landholding in the household. Bihar (48%) and WB (37%) show much lower level of indebtedness than AP (76%) and Telangana (79%). Thus the correlation between indebtedness and suicides is rather clearly established. It is, however, a matter of further research why agri-households in these two states are so highly indebted.
NAFIS has provided new insights into the conditions of households in rural and semi-urban areas which would be useful to policy makers in addressing specific challenges in various states. The data again proves that state specific policies are required to enable agri and non-agri households in rural and semi-urban India earn a decent income.
Part 2:
Despite Penetration of Institutional Credit, Farmers Continue to Rely on Moneylenders
NABARD’s survey shows that lengthy procedure for sanction of loans by institutions, demand for collateral security and short term of crop loan were the reasons for farmers seeking loans from non-institutional sources.
Representational image. Credit: CIAT/Flickr CC BY-SA 2.0
As an institution providing refinance to cooperative and regional rural banks for agricultural credit, NABARD’s interest in understanding the extent and width of coverage of farmers for obtaining crop loans is only natural. NABARD therefore devotes several chapters in its All India Rural Financial Inclusion Survey (NAFIS), to financial issues (household savings, investments, indebtedness, insurance and pension, microfinance and financial knowledge) of agricultural and non-agricultural households. Since indebtedness of farmers is considered a major factor leading to farmer suicides, a detailed examination of the survey findings would be in order.
The All India Debt and Investment Survey conducted by NSSO in its 70th round had found that as on June 30, 2012, 35% of cultivator households were indebted. NAFIS finds that in AY 2015-16, 47% of agri-households were in debt. Though the sample in two surveys is different we get a sense of increasing penetration of credit to farmers.
Launched by the A.B. Vajpayee government in 1998, the kisan credit card (KCC) scheme enables farmers to get credit limit to purchase crop seeds, fertilisers, diesel and other inputs at 4% interest (if loans are repaid in time). The farmer can draw money to the extent of limit sanctioned, as per requirement and as many times as she wants. For every crop cycle, the farmer does not have to go to a cooperative or bank for sanction of loan. NAFIS found that only 10.5% agricultural households held a valid KCC.
The Situation Assessment Survey of Agricultural Households during the NSSO’s 70th round (January – December, 2013) had found that out of 15.6 rural households in the country, nine crore were agricultural households. According to a reply given in Lok Sabha on March 9, 2018, there were 2.77 crore active KCCs as on March 31, 2017. Even though NAFIS left out agricultural households earning less than Rs 5,000 per month from agri and allied operations, the penetration of KCCs at 10.5% appears rather low. In states having poor coverage of KCC, a massive drive of inclusion is required to disseminate benefits of borrowing through KCCs rather than going to money lenders for loans.
The survey however, finds that agri-households which had a KCC, reported that against an average borrowing limit of Rs 1.39 lakh, amount drawn was Rs 91,000. It shows that the scheme has largely facilitated drawing of credit for agricultural operations by reducing procedural hassles of getting loan sanctioned for each crop cycle. However, lower drawings show that lack of confidence of earning enough profit to be able to repay the loan in time.
Indebtedness is one of the primary reasons for farmers’ suicide. Representational image. Credit: Katrin Park/Inernational Food Policy Research Institute
Borrowing from non-institutional sources
In a worrying finding from the survey, it is observed that 30.3% of agri-households still borrowed money from non-institutional sources like money lenders, relatives and input suppliers etc. About 9% agri-households borrowed from both institutional and non-institutional sources. In another encouraging sign of reducing dependence on money lenders, the NAFIS survey finds that out of average borrowing of Rs 1.07 lakh in AY 2015-16, agri-households borrowed about Rs 30,000 (28%) from non-institutional sources. Lengthy process for sanction of loans by institutions, demand for collateral security, and short term of (crop) loan were cited as reasons for seeking loans from non-institutional sources. NABARD has its task cut out for increasing the penetration to small and marginal farmers.
In another worrisome sign of dependence on money lenders, the NAFIS survey finds that out of average borrowing of Rs 1.07 lakh in AY 2015-16, agri-households borrowed about Rs 29,000 from non-institutional sources (27%). Lengthy procedure for sanction of loans by institutions, demand for collateral security and short term of (crop) loan were cited as reasons for seeking loans from non-institutional sources. NABARD has its task cut out for increasing the penetration to small and marginal farmers.
NAFIS also covers the penetration of crop insurance, finding that out of households which had taken any loan for agricultural operations, only 6.9% reported they had any crop insurance. It is thus a myth that banks deduct the insurance premium from all farmers who have taken loan on KCC. Premium is payable only on crops notified by the state government.
It is no surprise that only 1.7% of agri-households owning milch animals reported insurance for their livestock. The plight of uninsured agri-households who lost their animals and other agri-assets in the Kerala floods of August 2018 can only be imagined. In fact, while launching the Pradhan Mantri Fasal Bima Yojana (PMFBY), in April 2016, the government came up with a package insurance scheme under which in addition to crop insurance, the farmers had the option to buy insurance cover for fire, animals, pump set, tractor and personal accident. However insurance companies have not been successful in selling it due to high cost of marketing of diverse risks in a single insurance policy. The government has done well to keep premiums under PMFBY very low. Certain policy reforms in PMFBY and concerted effort by state governments (to conduct crop cutting experiments in a timely transparent manner) and insurance companies (to ensure timely settlement of claims) will surely result in increase in coverage of crop insurance and possibly other insurance products also.
Few farmers have insurance for their livestock. Credit: Reuters/Rajendra Jadhav
Reach of microfinance institutions
NABARD did well to seek information about reach of microfinance institutions (MFI) in meeting credit needs of households. At the national level, 23% of households had at least one member associated with an MFI, but the data is skewed. The all India average in high only because a few states like AP (61%), Telangana (65%), Odisha (44%) and Karnataka (40%) reported higher reach. UP, Rajasthan, Punjab and Haryana have less than 10% coverage of MFI. Odisha and Jharkhand (27%) have demonstrated that deep engagement with reputed NGOs (like Pradan) can help in increasing the reach of MFIs to even the most backward districts. The survey found that MFIs meet needs for personal loans for which institutional finance is not easily accessible.
Expansion of financial inclusion through Pradhan Mantri Jan Dhan Yojana has been one of the major achievements of Modi governments. About 32.17 crore accounts have been opened as on July 25, 2018. Out of these, 18.97 crore are in rural and semi-urban areas. But, in states like UP, where household earning is as low as Rs 6,668 per month, it is worthwhile to consider how many would deposit their cash income and then withdraw the same.
It is rather heartening that about 73% of survey respondents said they can use an ATM without anyone’s help and 52% can use internet banking. If it correctly reflects ground reality, it should be possible to switch to direct benefit of transfer (DBT) of food subsidy in states having high literacy, good road network and deep penetration of banks and telecom infrastructure. Rather than forcing beneficiaries to authenticate their identity through Aadhaar every month in states not having surplus food grains and poor internet infrastructure (like Jharkhand), the government should be switching to DBT in food surplus and developed states like Punjab, Haryana, AP and Karnataka. A commendable attempt
NAFIS 2016-17 is a commendable attempt to collect and analyse data of rural and semi-urban India. There are several surprises in the survey and a more detailed analysis of data will require state level tables for every chapter covered in the report. In a vast country with acute disparities in literacy, income, availability of ground water, cropping pattern and marketing network, it is only natural that a uniform national strategy for agriculture sector will not work.
In March 2015, the government had set up a task force on agricultural development under Arvind Panagariya, then vice-chairman of Niti Aayog. Based on the work of the task force, a solitary paper titled ‘Raising Agricultural Productivity and Making Farming Remunerative for Farmers’ was published by Ramesh Chand in December 2015. The Niti Aayog had also asked states to set up state-level task forces to prepare reports suited to the specific state. Some states did prepare their reports, but the exercise was not pursued and a good opportunity to document the specific action points for each state was lost. This survey itself indicates that there are success stories in several states which need to be replicated in other states.
Like previous NSSO surveys, this meticulous effort will also have a short shelf life. It would therefore be appropriate for NABARD to quickly organise a conclave to reflect on the findings and tweak policies to make farming viable.
Siraj Hussain is former secretary of Agriculture and Farmers’ Welfare (GoI) and currently visiting senior fellow at ICRIER.
NABARD presented a gift to the nation on August 16, 2018, when it released results of its NABARD All India Rural Financial Inclusion Survey (NAFIS). Among other things, the Survey estimates 2015-16 farmers’ income levels.
NAFIS combines strengths of NSSO’s Situation Assessment Survey (SAS) and RBI’s All India Debt and Investment Survey (AIDIS).
NABARD presented a gift to the nation on August 16, 2018, when it released results of its NABARD All India Rural Financial Inclusion Survey (NAFIS). Among other things, the Survey estimates 2015-16 farmers’ income levels. When in February, 2016, PM Modi presented his vision of doubling farmer incomes (DFI) by 2022-23, there was no assessment of the base (2015-16) aggregate income levels, and now, estimates from NAFIS fill that gap. NAFIS is based on a sample of 40,327 rural households in 29 states, of which 48% were agriculture households (agri-HHs) and 87% of them were small and marginal farmer households. NAFIS combines strengths of NSSO’s Situation Assessment Survey (SAS) and RBI’s All India Debt and Investment Survey (AIDIS).
Based on household-level data, NAFIS estimates that an average Indian farming household earned `8,931/month (`1,07, 172/year) in the agriculture year 2015-16. This is up from `2,115 earned in 2002-03 as per NSSO’s SAS, implying a compounded annual growth rate (CAGR) of about 12% in nominal terms and 3.7% in real terms (2015-16 base) in the thirteen years. One must, however, be cautious when comparing NSSO and NAFIS estimates. Because of a wider definition of rural areas—unlike NSSO, the NABARD survey includes areas that are bigger, including tiers 3,4 and 5—and a higher threshold level of income (`5,000) from agricultural and allied activities, while NSSO’s threshold income level is `3,000. This is likely to create an upward-bias in NAFIS estimates of farmers’ income.
If NAFIS followed NSSO definitions, the 2015-16 estimate of farmers’ income would have been somewhat lower, and so would have been its growth rate (below 3.7%). The survey also estimates income of non-agri rural HH at `7,269/month, more than half of which comes from working as wage labourers. The overall weighted average monthly income of a rural HH is found to be `8,059/. Regarding financial aspects of these rural agri-HHs, NAFIS found for the reference year that about 43.5% borrowed money with the average availed loan of `1,07,083. 60.4% of these HHs borrowed from institutional sources, 30.3% from non-institutional and 9.3% from both. Close to 56% of loans were for non-agri purposes. More than half (52.5%) of agri-HHs were found to be indebted with an average outstanding debt of `1,04,602 for the year. Almost 88% of all rural HHs had bank accounts, and their monthly consumption expenditure on food was 51% of total expenditure.
What does this data mean for the PM’s dream of doubling farmers’ income (DFI)? The Dalwai committee, set up in April 2016 to advise on a strategy towards DFI by 2022, did not have any benchmark income levels for 2015-16. So, the committee derived them by applying yearly growth rates of state-wise net-state-domestic-product (NSDP) to NSSO estimates of 2012-13 income levels. For 2015-16, the committee found that average Indian agri-HH earned about `8,059 per month. This estimate is lower than that of NAFIS, which is at `8,931. In any case, to see what happened between 2002-03 and 2015-16, we compared nominal and real income levels and estimate state-wise growth rates.
The attached figure gives real income levels (at 2015-16 prices) for three years (NSSO’s 2002-03 and 2012-13 and NAFIS’s 2015-16) and growth rates for major states and pan-India. Comparing incomes, we find that Punjab, with `23,133, tops the list while UP, with `6,668, is at the bottom, with the all India average at `8,931. In terms of CAGR, Odisha tops with 8.4%, though from a low base, while J&K with -2.3% is at the bottom, due to an abnormal drop in income in 2015-16. All-India CAGR in farmers’ real income is 3.7%, which is roughly the same as the agri-GDP CAGR (3.6%) during the same period. In terms of sources of incomes, NAFIS offers interesting insights, particularly for the Dalwai committee. NAFIS estimates that in 2015-16, 35% of farmers’ income came from cultivation, 8% from livestock, 50% from wages and salaries, and 7% from non-farm sectors.
The year 2015-16 was a second consecutive drought year (rainfall in 2014 was 12% below normal, while that in 2015 was 14% below normal), and comparing it with NSSO’s 2012-13 structure, we find that income share from cultivation and livestock fell from 60% in 2012-13 to 43% in 2015-16. It appears that working as labourers is a fall-back option for the average farmer in drought years. Besides, increasing pressure with shrinking average holding size (NAFIS estimates it at 1.1 ha) is presumably forcing farmers to work as labourers to meet their needs. This is very different from what the Dalwai committee assumes, that 69-80% of farmers’ incomes by 2022-23 will be coming from farming of crops and animals. Interestingly, all three surveys were done in years facing deficit rains: rainfall in 2002-03 was 19.2% below normal, in 2012-13 it was 7.1% below normal and in 2015-16 it was 14% below normal. Thus, one wonders whether these surveys capture the true picture of agriculture and farmers.
Going forward, it would be better if NSSO and NABARD ensure that their next surveys belong to normal rainfall years. To achieve PM Modi’s dream of DFI by 2022-23, the Dalwai committee points out that farmers’ real incomes need to grow at 10.4% per annum, i.e., 2.8 times the growth rate achieved historically (3.7%). This sounds like a challenge to raise the country’s GDP growth from 7.2% to 20%! Is this really feasible? Examining various govt. policies and programs launched in the last 3-4 years, especially their implementation, be it crop-insurance, focus on irrigation (99 projects), new MSP formula of 50% above A2+FL cost, etc., does not give confidence that the DFI dream can be achieved by 2022-23, or even by 2025. It can possibly be done by 2030, unless the govt. undertakes drastic steps to augment farmers’ incomes at a faster pace.
Ashoka Gulati & Shweta Saini
Gulati is Infosys chair professor for agriculture and Saini is senior consultant at ICRIER
Press Information Bureau
Government of India
Ministry of Agriculture & Farmers Welfare 24-July-2018 15:54 IST
Waiving off Agricultural loan
https://pib.gov.in/newsite/PrintRelease.aspx?relid=180924
The Union Government, at present, is not considering any loan waiver Scheme for farmers, as such, waivers may impact the credit culture of a State by incentivising the defaulters, even if they are in a position to repay the loan, and thus, create/amplify the moral hazard by discouraging those borrowers who have been regular in repaying their loans. Further, each waiver granted makes it even more difficult to reject any future similar demand.
Reportedly, various State Governments including Tamil Nadu, Maharashtra, Karnataka, Uttar Pradesh, Jammu & Kashmir, Punjab, Chhattisgarh, Andhra Pradesh, Telangana and Union Territory (UT) of Puducherry have in the recent past announced their own farm loan/debt waiver Schemes to extend relief to the needy farmers. The details of debt/loan waiver announced by these States/UT is given at Annexure. Loan Waivers announced by various States
Details of States/UTs which have announced Farm Loan Waivers in recent past:
SN
Name of State
Details
1.
Tamil Nadu
Government of Tamil Nadu had announced waiver of loans outstanding vide GO No.50 dated 23 May 2016. Outstanding Crop Loan, MT-Agri & LT (Farm Sector) loans issued to Small & Marginal Farmers by the Cooperative Banks as on 31 March 2016 were waived. Rs.5318.75 crore were waived in respect of 1202075 farmers.
2.
Maharashtra
The Maharashtra Government announced Debt waiver for farmers vide GR dated 28.06.2017 covering 31 lakh farmers with amount of debt waiver of Rs. 30,500 crore.
3.
Karnataka
Karnataka government vide Govt. order No CO313 CLS 2017 dated 23 June 2017 announced waiver of farm loans of up to ₹50,000 taken from State-run Cooperative Institutions covering 22 lakh farmers with amount of debt waiver of Rs. 8,165 crore.
4.
Uttar Pradesh
Government of Uttar Pradesh on April 4, 2017 announced a Rs. 30,729 crore scheme waiving crop loans up to Rs.1.00 lakh for Small and Marginal Farmers. In addition to this, Rs.5,630 crore was allocated for writing off bad loans of around seven lakh farmers, which had become NPAs for banks. This takes the total amount allocated for loan relief to Rs.36,359 crore. The Chief Secretary, Govt. of UP, vide DO letter dated 24 May 2017 had issued a letter to CMD/CEO of all Scheduled Commercial banks informing State Govt.’s decision to implement a scheme for redemption of crop loan debt of Small and marginal Farmers of the state.
5.
Jammu Kashmir
Jammu & Kashmir Government declared Debt Waiver scheme under KCC vide Govt order no. 16-F of 2017 dated 23-01-2017. KCC loans upto Rs. 1 lakh were given 50% waiver in a phased manner. Total amount waived was Rs.244 crore for 1.15 lakh farmers.
6.
Punjab
The Punjab Government announced Debt waiver for farmers vide Notification No. 8/259/17-Agri/2(10)/19235 dated 17.10.2017 covering 10 lakh farmers with amount of debt waiver to the tune of Rs.10,000 crore.
7.
Chhattisgarh
Chhattisgarh Govt. announced Debt relief/waiver vide its notification no. 2838/2015/02-15/30-15F dated 26 December, 2015. 25% of debt waiver was provided for, amounting to Rs. 129.76 crore for 189379 farmers.
8.
Union Territory of Puducherry
The Union Territory of Puducherry vide G.O. Ms.10/Coop. dated 12/01/2018 announced the agriculture loan waiver Scheme 2016-17 covering loans of all agricultural and allied activities availed through Cooperative structure as on 31.03.2016.
9.
Andhra Pradesh
Andhra Pradesh Government announced Waiver of Agriculture crop loan to farmers vide GO Ms.No.164 dated 02.08.2014
10.
Telengana
The Telangana Government announced Debt waiver for farmers vide GO RT No.69 dated 13.08.2014
This Information was given by the Minister of State for Ministry of Agriculture & Farmers Welfare Shri Parshottam Rupala
Mallappa from Tattepalle, Vikarabad district, Telangana, called on Kisan Mitra helpline multiple times expressing anguish and distress, on 17th May 2018 evening around 5 PM, when things reached a state of desperation, he said he would commit suicide. Mallappa’s younger daughter’s treatment costs a lot of money while the elder daughter does not have a job. On the one hand the bank loan needs to be paid off, but on the other hand, he lacks capital for his sugarcane crop. With no drip irrigation and faulty land records were compounding his problems. All these problems were deeply disturbing him and his family. Mallappa’s story is just the tip of the iceberg.
Every few days we hear many distressing news of farmer suicides. What is causing farmers across rural belt in India to commit suicide? Is it the farm distress? Has agriculture become so unsustainable that farmers see no other way out? Are we there for our farmers? There are several such questions which troubled Center for Sustainable Agriculture(CSA) and they decided to take concrete action through Kisan Mitra Helpline.
How is Kisan Mitra helpline different from others?
There are several helplines where farmers can call in, but most of them are just related to technical agricultural questions. What our farmers need is someone who listens to their problems and helps them by directing them to the right people for a solution. Kisan Mitra helpline is just that and much more. Mr Harsha from Kisan Mitra’s core team says “Understanding rural distress and issues and attempting to solve them one issue at a time, as well as making wider policy corrections has shaped what Kisan Mitra is today”.
Kisan Mitra helpline centre
Kisan Mitra Helpline was set up to understand the problems faced by farmers of Vikarabad district in the state of Telangana and to reduce farmers distress. Vikarabad is one of the backward areas in Telangana state. This helpline was launched on the occasion of Dr.B.R.Ambedkar Jayanti, on 14th April 2017 by Centre for Sustainable Agriculture with the support from the district administration, Vikarabad.
The district administration has made the Agriculture Department the nodal agency responsible for coordinating the complete process of this helpline with the help of all related departments at the district level. Centre for Sustainable Agriculture takes the lead in the running the Kisan Mitra helpline and handling of farmer’s distress calls. A team of five people have been appointed to manage the incoming calls, and one individual was appointed to oversee field-level coordination and interactions with farmers.
Talking to The Logical Indian, the Vikarabad district collector M/s Divya Devaraju explains the ideation and execution of Kisan Mitra. She says, “ Kisan Mitra is an outcome of a brainstorming session one day in Vikarabad Collectorate with different stakeholders working on farmer suicides. It was felt that we are often reacting to farmer’s problems after they occur. Distress doesn’t occur in a day. A small land record issue here, a bank loan issue there, availability of subsidised seed elsewhere are often left unattended to, which lead to piling up of issues and finally distress. Hence we thought can we proactively track the problems of farmers and solve them by taking to a logical conclusion. This was the birth of the idea of Kisan Mitra. Govt Order Ms 421 of the State Government in 2004 stipulated that there should be a farmer distress helpline in every collectorate. We simply took the mandatory requirement of the helpline and tried to make it more comprehensive. It is also an effort to make all stakeholder departments like revenue (land), agriculture, banking, electricity, agriculture marketing etc., aware of the issues of the farmers and work in tandem towards a solution.”
Vikarabad, collector Divta Devarajan interacting with one of the farmers family members who took his life.
Centre for Sustainable Agriculture and Kisan Mitra’s team launched an awareness campaign which included flyers, posters, events such as suicide prevention week etc., while the agriculture department took up the initiative of wall writings in every mandal office to create and raise awareness among farmers and their family members. In addition to this, the field coordinator also visited many villages personally to interact with the community and distribute pamphlets and flyers about Kisan Mitra. The Kisan Mitra team and the district administration also reached out to various local print media outlets to reach a broader audience.
As of March 30, 2018, Kisan Mitra has worked on 3,022 cases in Vikarabad district. 740 of these cases were from farmers seeking information related to agriculture requiring technical knowledge and were diverted to the Kisan Call Centre(the govt helpline) and the Agricultural department. The remaining 2,282 of cases were from farmers with issues regarding non-agricultural matters requiring more considerable intervention or attention from the different government departments amongst other interventions. Kisan Mitra also beganoperations in Adilabad district a couple of months ago. Since inception, they have tackled 289 cases. 216 cases were issues that needed intervention. They have also started operations in Mancherial from 29th March 2018.
Coming back to Mallappa’s case, Kisan Mitra sent their field coordinator Sangameshwar to visit the farmer within 2 hours.They met the farmer at the MRO office directly so that his grievances can be taken to the MRO instantly. In addition to this, Sangameshwar also visited the family and collected further details of the distress and reported it back to Kisan Mitra team on the same day. Kisan Mitra team then immediately swung into action and sent emails and SMSes to the district collector and other administrators the very next day.
Peddemul’s Mandal Revenue Officer (Tahsildar) responded immediately and called Kisan Mitra Field coordinator to the office to understand the issues that the farmer was facing and planned for a swift action on 18th May and by 19th morning, the farmer his family members were given the modified land record copies. Peddemul Horticulture officer invited the family members and oversaw the application process for Drip irrigation end to end. Following this, on 20th May, Sub-collector invited the Malanna, MRO and Kisan Mitra Field Coordinator and his daughter who had finished her degree and she was given a job locally.
Malanna received timely help, he has gathered strength and is now determined to solve his long-term issues and move ahead in life. The fact that someone cared brought him back from the brink of death and gave a new lease of life to his family. Mallappa says “ I am alive today only because of Kisan Mitra. The fact that they were there for me and gave me the courage to face difficulties, and in the future also I am ready to fight all the difficulties”. Kisan Mitra is still helping him in negotiating and dealing with his long-term problems.
Mr Doma Srinivas of Doma village says that he cannot imagine his life without Kisan Mitra. “Kisan Mitra not only saved my father’s life and gave me hope but also showed me a path forward in life,” he says. Mr Doma Srinivas was working odd jobs in another town when he was informed that his father had announced his intention to end his life in a local kisan sabha. By this time they were facing several financial difficulties as a family.
Agriculture was not proving to be a sustainable way of life for them. They had crop loans, and the bank was not helping them as colossal interest had accrued. Mr Srinivas read in the paper about Kisan Mitra and approached them. Kisan Mitra’s team reached out and gave confidence to his father. In addition to this, they also helped by training him to be a field coordinator so that he can take care of his family members as well as help other farmers and their families. Mr Srinivas is negotiating with the bank for a one-time settlement and is hopeful of a good life ahead.
Kisan Mitra has helped several families like this in a very short span of time. What is remarkable about the team of Kisan Mitra, the support staff, district administration and the Centre for Sustainable Agriculture is that they are incredibly committed, passionate and caring. They are not just looking for immediate relief but long-term results. They are meeting farmers to understand the problems that they are facing with crop insurance, crop loans and the NREGA money that has not reached them. It doesn’t stop here, they are also looking to get as much help as possible for the upkeeping the mental health of the farmers so that they can deal with stress. They are making sure farmers are ‘heard’ and that farmers’ lives indeed matter. In Mr Harsha’s words “Next phase of Kisan Mitra is about collaborating with people/communities across the country in understanding local Issues, sharing them to a wider audience and understand from different experiences on diverse ways of solving them.”
https://www.thehansindia.com/posts/index/Warangal-Tab/2018-03-31/Kisan-Mitra-Helpline-services-launched-in-Mancherial-district/370675
The Hans India null 31 March 2018 8:35 AM HIGHLIGHTS
District Collector R V Karnan launched the Kisan Mitra Helpline portal at a function held here on Thursday. Mancherial: District Collector R V Karnan launched the Kisan Mitra Helpline portal at a function held here on Thursday. The performance of the portal in Adilabad and Nizamabd district was successful, he said giving reasons for launching the same in Mancherial district. Using the helpline services, the morale of the farmers should be boosted when disappointed, he said. Agriculture officer at district level and Mandal Parishad Development Officer would officiate as nodal officers for the helpline service. Also Read – Cadre betting big on their leaders’ victory in Adilabad Advertise With Us He asked officials to strive to make Mancherial district is free from suicides by responding to the problems of farmers using the helpline service. The farmers should convey their problems to the helpline service using the toll-free number 1800 120 3244. The helpline service will remain operational daily from 8 am to 8 pm. Later, Karnan released a poster on dairy development scheme of the lead bank and also a poster on spurious seeds. Bellampalli sub-collector Rahul Raj, farmers coordination committee district convener M Guravaiah, District Agriculture officer Vinod Kumar, DRDA project officer Sankar and others took part in the programme.
