Challenges For India's Farmers Are Rising Despite A Healthy Monsoon

Though this week the Union Cabinet approved seven major agri schemes with total outlay of Rs 14,235.30 crore, the focus of the schemes is predominantly on Digital Agricultural Mission and agricultural research. Mitigation of immediate problems of the farmers, including sowing and harvesting of kharif crops, remain unaddressed.

Sowing of kharif crops typically takes place around June and July and are harvested around October.

“With continued rains this month and forecast of more showers, there is fear among farmers that large crops such as that of soyabean could get damaged,” Anil Ghanwat, senior leader of Shetkari Sangathana, a Maharashtra based farmers union, told The Secretariat.

Soyabean, which is currently selling at below the minimum support price (MSP), is produced in Maharashtra, Madhya Pradesh and Andhra Pradesh among other states. The government has increased MSP for Kharif crops. For soyabean, though the MSP is fixed at Rs 4,892 a quintal, it is selling at Rs 3,500-4,000 per quintal.

Now with the untimely rains, apprehensions are rising.

Frequent pest attacks have also impacted the sowing of cotton, which has fallen this season. However, sowing of key food crops such as rice, cereals, pulses and oilseeds have been higher. But excess supplies can dent prices in the market, which can further hurt the farmers, despite MSPs. Besides, large scale export restrictions of non-basmati rice and wheat continue to irk the farmers.  

“There is an urgent need to put in place effective policies that can drive productivity of the agriculture sector. More than economics, politics has played a role in driving the sector and naturally this is leading to multiple problems. Until the current policies which are now outdated, are overhauled, problems for the sector will continue to mount,” Vijay Sardana, Supreme Court advocate and expert for food and agrochemicals matters, told The Secretariat.

Credit Availability Is An Issue 

The Reserve Bank of India (RBI) data reveals under the priority sector category, loans during the April-July period this year towards agriculture and allied activities increased 5.5 per cent – marginally higher than 5.2 per cent registered in the same period of 2023-24.

However, the data does not present the full picture. “Many farmers are unable to access credit due to various issues,” Ghanwat said, adding that several banks are now seeking CIBIL scores from farmers to ascertain their credit worthiness.

“The issue of CIBIL has been a huge challenge for farmers. Though the Maharashtra government has directed banks not to ask for CIBIL scores for farm loans, the lenders continue to do so. Now this is a problem for farmers,” he added.

According to the farmers’ union, a large number of farmers in Maharashtra have also been denied benefits of crop insurance for 2023-24. Sources said that the situation is not much different in other states as well. The Centre is yet to release the amount for crop insurance, the farmers' union claimed.

The union has now demanded release of the insurance amount within the next few days or else it warned of a protest march in Mumbai.

It is also no secret that lenders tend to extend crop loans to the bigger farmers, leaving out the small and marginal ones. 

The Economic Survey, this year stated that there is an urgent need to boost agriculture investment, especially in the context of doubling farmers’ income. Though there are about eight crore kisan credit card holders in the country, the default rate has increased.

Repeated waive-offs of bad loans have impacted banks’ businesses too while making it even more difficult for many farmers to access credit.

With the rising default rate for KCC, banks are becoming wary in offering loans to such farmers, sources said.

Supreme Court Sets Up Committee

Meanwhile, the Supreme Court has set up a high-powered five-member committee chaired by former Punjab and Haryana High Court judge, Justice Nawab Singh, to look into the grievances of the farmers, agitating at the Shambhu border between Punjab and Haryana.

Besides Singh, the other members are PS Sandhu, former DG of Haryana, Devender Sharma, Professor of Eminence at GNCT Amritsar, Sukhpal Singh, agricultural economist, Punjab Agriculture University, along with special invitee BR Kambhoj, Vice Chancellor of Chaudhary Charan Singh Agriculture University, Hisar.

Earlier, the apex court had set up a panel to study the three controversial farm laws that were eventually scrapped. The panel had recommended that the laws should not be scrapped.

In September 2020, the government introduced three farm reform bills — The Farmers’ Produce Trade And Commerce (Promotion And Facilitation) Bill, The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, and The Essential Commodities (Amendment) Bill.

These bills, aimed at creating a free market for sale of farm produce and removing the involvement of middlemen, have faced stringent opposition from farmers.

As challenges for farmers rise with climate change and geo-political uncertainties, the need of the hour for the governments, both centre and states, is to chart out effective policies driven by pure socio-economic dynamic and not political optics to support the agriculture sector.

It is the key to food security and supporting the small and marginal farmers, who are the worst affected.