A sector that provides employment to almost 60% of the population and comprises 13% of the GDP, agriculture, however, has been the most distressed sector with an epitome of problems some of which are discussed below:
1) Input costs: Increasing prices of seeds, fertilizers, machinery, irrigation has made agriculture non-remunerative. Farmers tend to look for other sources of income instead (working in MGNREGA, construction works, etc). Although some policies providing fertilizer and irrigation subsidies (PMKSY, urea subsidy) have relieved the plight of farmer, they remain ineffective in targeting the most needy. Lower prices of produce despite good harvest further aggravates the burden of high input costs.
2) Flawed MSP Calculation: The Swaminathan Committe Report(SCR) recommended a MSP of 50% above the "input costs". This "input cost" was calculated in three ways i) A2 cost (cost seed, fertiliser, machinery, etc), ii) FL+A2 (Cost of labour put into the harvest + the A2 cost) and iii) C2 cost (includes FL+A2+ the cost of land rent). The SCR recommended input cost to be the C2 cost but the government takes FL+C2 into calculation of MSP. Moreover, the policy of MSP is mostly exploited by rich farmer as poor farmers are unaware of the scheme.
3) Non-inclusive crop insurance scheme: 60% of India's agricultural land depends on monsoons. Erratic rains, droughts, etc cause crop failure. Crop insurance are provided only to land holders. Landless farmers and tenants cannot avail insurance provided by the government. Insurance companies are biased towards large farmers and there is a huge disparity in delivery of insurance schemes to poor farmers. Moreover the farmers often get less and delayed compensation under these schemes (PMFBY).
CONCLUSION:Poor institutional support, lack of infrastructure (cold storage, warehouse), logistics, APMC problems, low risk diversification, etc. adds to the perpetual state of farm distress increasing farmer suicides. The NITI Aayog 3 year agenda has targeted doubling farmer income by 2022. Only by addressing the above problems and inclusive government schemes, the target can be achieved.
