Read the Farmer distress signals : Important Topics for UPSC Exams

Why in news?

On the occasion of anniversary of Gandhi’s Dandi March of 1930, farmers started the week-long march which reached Mumbai earlier this month.
Agriculture growth rate has been unsteady in the past and the events of farmer’s suicide due to distressed agriculture has led to various protests.

It was unprecedented in many ways since it was mostly silent and disciplined, mostly leaderless, non-disruptive and non-violent, and well organised.
It received the sympathy of middle class city dwellers, food and water from bystanders, free medical services from volunteer doctors, and also bandwagon support of all political parties from the left to the right.
Even the Chief Minister of Maharashtra said he supported the cause (not the march), but as head of government his job was to address their issues, not to agitate.
The most remarkable thing about the march was that it was successful, and the State government agreed to all the demands, including pending transfer of forest land to Adivasis, expanding the scope of the loan waiver and ensuring higher prices for farm produce.

Not all agitations have been peaceful or successful. In 2017 we saw protests, in Haryana and Rajasthan they tried to block highways which led to traffic chaos.
In Madhya Pradesh, in Mandsaur district, the protest turned violent, led to police firing and deaths of farmers.

Monopoly procurement continues.
There is little progress in direct link between farmer and buyer.
Due to the fluctuations in the market forces of demand and supply farmers are facing price uncertainties.
Foreign direct investment in farm to fork chain is very restricted.
Half the farmers don’t have access to formal credit, since most of them don’t own the land that they till.
Contract farming remains virtually banned.
Land leasing is not possible (but done informally).
Moneylenders are taboo, even though they might be in the best position to address credit needs, albeit with proper regulation.
The farmer’s plight is full of woe, exposed to risks from prices, demand, weather, pests and whims of policy and regulation.
The government’s aim to double farm income in the next four years is a near impossible feat but signals the right intention.

It’s no surprise that crisis is chronic, and loan waivers become imperative, more for moral and ethical reasons, than economic.
Loan waivers punish those who worked hard and repaid.
Banks don’t issue fresh loans out of their own risk aversion. Hence, loan waivers are a bad economic idea but often a political compulsion.

The same is true of rewarding farmers with 50% more minimum support price (MSP), no matter what the cost. This paradigm of cost plus pricing is bad economics.
Sugarcane grows cheaper in Uttar Pradesh in the Gangetic plains than in drought-prone Maharashtra. But with an assured cost-plus MSP, there is little incentive to diversify crops to suit weather and cost conditions.
Although the step taken by the govt is in consonance with Doubling the farmer’s income by 2022.

Neem-coated fertilizer has reduced leakage.
Direct benefit transfer to the farmer-buyer will reduce subsidy further.
Soil cards ensure appropriate matching of inputs to soil conditions.
Giving tax holiday to the farmer producer companies is also the right fiscal incentive.

The most comprehensive recent blueprint for reforms and rehabilitation of the farm sector is the report of the National Commission on Farmers, chaired by M.S. Swaminathan which is already over 10 years old and several of its ideas like decentralising public procurement of food grain to the lowest level possible and setting up of grain banks at the district level are yet to be implemented.
The workforce which depends on agriculture for its livelihood need to be reduced since there is considerable underemployment and low productivity, but farmers are unable to exit to other livelihood options.
There is urgency of accelerating industrial growth and improving the ease of doing business in order to generate employment in sectors other than agriculture.
Agriculture should be transformed to a truly commercial market-based enterprise.

To create opportunities outside farming for large scale exit of the workforce;
To connect farmers to the value chain of farm to fork, including agribusiness;
To remove restrictions on movement and exports of farm produce and let them tap into international market,
To also allow easier land transfers including leasing;
To encourage crop diversification and land consolidation that reverses fragmentation.