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CoverStory AGRICULTURE

SPIRALLING DIESEL PRICES he owes to the banks. In this case, ultimately he finds
Hike in the fuel prices adds burden on farmers di- himself caught in debt trap and commits suicide. The
rectly and indirectly. Direct impact is in the form of banks have Debt-Swap Scheme to free the farmers
increase in the diesel price. Indirect impact is felt in from loans due to the moneylenders, but progress of
the garb of revised prices of all inputs. The hike in the scheme is not satisfactory.
diesel price from an average 48 per litre to 80 per Punjab, for example, is an agriculturally prosper-
litre has increased the cost of cultivation. The cost of ous state with almost 100 per cent public procure-
fuel price is built into all the goods and a service pur- ment of food-grains (wheat and paddy). Farmers
chased and leads to inflation in all the sectors. As a in the state witnessed huge prosperity during and
consequence of frequent price revisions of fuel price in the period immediately followed by the green
during the regime of Modi government, the cost of revolution. This prosperity was well aided by the
cultivation has increased by 1500- 2500 per hec- government policy of providing agricultural inputs
tare depending upon the crop, for the farmers who at highly subsidised rates and keeping the prices of
practice mechanised farming. This has squeezed the
margins of the farmers because the remuneration of
the crops has not increased proportionately.
The successive
INDEBTEDNESS
Why has the indebtedness being rising despite rapid governments have
expansion of banking and higher credit allocation
year-on-year? Prof Satish Verma, an RBI Chair Pro-
fessor at Centre for Research in Rural and Industrial failed to take up the
Development, Chandigarh, said that indebtedness in
not the key reason for the predicament of the farm- cause of the farmers.
ers, though it has been the triggering factor in most
of the cases. Indeed, indebtedness is the manifesta- The promises have been
tion of a number of factors through which the thread
of suicides is commonly believed to run. It is mainly made to ameliorate the
the agricultural distress rooted in crop failure, de-
pressing prices of agricultural products, rising cost
of production, lack of irrigation facilities, monsoon situation of farmers
failures, floods, pest attacks, spurious seeds and pes-
ticides and policy paralysis, that is the igniting factor but their problems
leading to farmers’ suicides. Diverting loans for non-
productive purposes has also been widely quoted as continue to multiply Farmers struggle
the factor that ultimately causes the farmer to com- with disposal
of stubble
mit suicide in the event of his failure to repay the
loaned amount. Raising loans from the moneylend-
ers and commission agents has always been stressful
that, in some cases, has also induced suicides. food-grains at higher levels. This provided them huge come accustomed to a particular standard of living CLIMATE CHANGE AND AGRI INCOME
Farmers have diverse credit needs and all of these margins that the farmers used for up-scaling their following the green revolution. The rising temperatures and changing climate is an
cannot be met by the banking sector. Farmers re- living standards. In the subsequent period — start- Moreover, the cost of essential services such as ed- area of concern for agriculture economists as it may
quire funds for meeting domestic as well as other ing particularly from the era of liberalisation of 1991 ucation and health skyrocketed in the post liberali- affect the productivity in agriculture and undermine
non-productive expenditures. Banks extend credit -- the liberal import of food-grains depressed their sation period. Hence, maintaining living standards the farmers’ income. The Economic survey of 2017-18
for productive purposes only. Crop loans, which prices in the local markets. Also, the government fol- became out of reach of the paying capacity of the had pointed out that the climate change will affect
are eligible for interest subvention of three per cent lowed a policy of keeping the food prices low to en- farmers which put him in a state of quagmire and the productivity and farmers’ income. No matter
subject to fulfilment of the terms and conditions, ac- sure food security in the country. The cost of produc- distress. how much we invest in inputs and soil fertility, the
count for the major share in agriculture credit. Since tion also rose at a rate much higher than the output. The number of farmers’ organisations operating vagaries of weather (excess or scanty rain) can ne-
the banks do not have control over the end use of Indeed, the terms of trade between agriculture and in the country is quite large. These have affiliations gate all the investments.
these funds, the possibility of their diversion for non- non-agriculture sector which was favourable before with the political parties that have vested interests According to A Nambi, Director, (Climate Resil-
productive purposes is quite high. Ultimately the 1991 turned unfavourable for agriculture sector in that are opposed to each other. ience Practice), World Resources Institute (WRI In-
farmer finds himself in a position where he is unable the subsequent period. Therefore, the farmers need to unite themselves dia), agriculture in India is facing sundry problems
to return the amount and takes recourse in suicide. Thus, the farmers’ margins in the post liberalisa- under a common banner that will serve only the and climate change is one of the factors affecting ag-
In some cases, the farmers borrow from the com- tion period continuously declined while their expen- farmers’ movements rather than sub-serve the in- riculture. He said that tropical weather is very com-
mission agent/moneylender to pay off the debts that ditures did not fall correspondingly as they had be- terests of the political parties. plex and difficult to understand. Right information at

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