AGRARIAN DISTRESS AND NEED FOR REFORMS J.VANITHA Lecturer in Economics, Quai !e!mi""at# Go$t.

%o""e&e 'or (omen, %#ennai ) *+. employing over 6 / of those in the labour The achievements of the country during the past 62 years are many, including adherence to a democratic system of governance and avoiding famines of the kind that were frequent during the colonial rule. The most prominent inadequacy relates to human development such as as measured and by adult indicators child growth . with an average growth rate of less than 2/ per annum between ())( and 2 1. This is much lower than the growth rate during the ()2 s, when agricultural output grew at a rate of 3.1/ per annum. The accompanying deterioration in livelihood has not been e4perienced evenly in the sector. There is higher share of marginal farmers and agricultural labourers in the rural population and it is precisely these poorer groups which have been the worst affected. %onsumption growth has been the lowest for these groups while large farmers have seen the highest consumption growth after ())(. This pattern reverses the progressive trend of the ()2 s. The real wages for agricultural labourers actually declined in some states and grew sluggishly -hile services and manufacturing sectors of the "ndian economy have seen sharp increases in their respective growth rates since ())(, the agricultural sector . in others 5with few notable e4ceptions6 in the first decade of reforms. The most severe manifestation of the distress being e4perienced by unprotected groups in the force . is languishing. 0ince the ()) s, there has been a significant slowdown in output

malnutrition, poverty, illiteracy, infant and maternal mortality rates, and access to sanitation and clean drinking water. Nearly 7 per cent of our population is still rural with farming as the principal source of livelihood. The approach paper to the !" #lan recently approved by the National $evelopment %ouncil mentions, &economic growth has failed to be sufficiently inclusive, particularly after the mid'()) s. *griculture lost its growth momentum from that point on and subsequently entered a near crisis situation, reflected in farmers suicides in come areas+. ,nless the country regains its lost momentum in this sector, there will be widespread agrarian distress.

country has been the spate of farmers suicides, largely among small cultivators. REASONS FOR THE %RISES, -hile a full e4planation cannot be detailed for reasons of space, we think that changed technology, altered conditions of e4change, and a state policy that has combined liberali7ation with feeble strategies to address the needs of the rural poor are the ma8or contributors to the noticeable malaise in rural "ndia. The slowdown in output growth rates owes partly to decreasing returns to 9reen :evolution technologies over time, and partly to the liberali7ation policy framework that was adopted towards agriculture. 0ince the ()2 s, 9reen :evolution technologies have had less impact on growth, evidence of which is seen in declining yields per acre of cultivation. ;ower levels of public investment 5as part of the reforms6 have not been matched by increases in private investment and have further led to less than adequate levels of irrigation and output. <inally, greater market orientation has led to convergence of output prices with lower international prices which, in turn, are heavily determined by the subsidies given to first world farmers. =qually, input costs have risen, and as a result, farmers profits have been squee7ed. *nother critical feature of the () s story

has been that institutional credit has not kept pace with the growing credit needs of small and marginal farmers. This is mainly a result of the withdrawal of the state from social banking. *s a result, farmers 5especially small farmers6 have become much more dependent on informal sources of credit since the reforms began. That is they now depend more on moneylenders and on networks of market intermediaries who work in rural markets who typically charge much higher interest rates for credit. The net result has been sharply increased debt burdens among the poorer rural groups and increased distress. :ural continuing falling. "n 2 "ndia distress. is in deep and

,nemployment

continues to rise. >utput growth continues ?, gross food grain output was 2 1 million tones or only (62kg net output per head of population. There is loss of purchasing powder due to drastic reductions in the states spending on rural development during the last decade. There is also a fall in per head food grain absorption which is now one of the lowest in the world at round (1? kg. for all "ndia, 2 kg. lower than a mere si4 years ago and it is lower still in village "ndia. <orty years of successful effort to raise food grains absorption through the 9reen :evolution and planned e4pansionary policies has been wiped out in a single decade of deflationary

economic reforms. "ndia is back to the food grains avail ability level of 1 <rom ())7 to 2 years ago. 1, 2), 362 farmers have

waived and ? crore farmers are benefitted here the loan is meant for those who are owning less than 2 hectares. 0o the loan is meant for the marginal farmers who own one hectare and for the small farmers who own one to two hectares. The definition of marginal and small farmers are to be remodified. "t should be defined on the basis of usage of land or cultivable position of land. ;and classification should be done as D.. area, arid, semiarid areas6 "n some districts the farmers own ? to 1 hectares which are in semiaried, arid areas and their income is uncertain and their destiny depends on the behavior of the monsoon. Fere we neglect the agricultural workers who do not own a piece of land. ;oan waiver is the price which has been given for the neglect of rural "ndia during the past several decades. Goth the central and state governments should set up immediately an indebted farmers support consortium at the district level to assist the farmers to relived them of their past debts improve their productivity and profitability

committed suicide on an average, one "ndian farmer committed suicide every 32 minutes. =very 3 minutes, "ndia@s top ( richest lakhs. persons are earning (2 crore or (2

"ndian farmers wages is :s.? A' per day. "ndian richest person is earning :s.? lakhs per minute. This e4ample alone is enough to show that the rural "ndia is in deep distress. -e rank (st and ?th in super rich and (22th in human development. Bost of our billionaires are from Bumbai. Bumbai is a home to a quarter of "ndia@s C( millions. Bumbai is the capital , of

Baharashtra, perhaps our richest state. *nd it has the highest suicide rates of D "t is a state where rural poverty has gone up. -hat "ndia needs today is a new policy for the rural poor. *ll those who reali7e the urgency of the issue of agrarian distress would wish to convey a sense of that urgency to the 9ovt. The distress in agriculture is a distress of the country as a whole and so needs urgent action some of the suggestions are given belowE 0mall and marginal farmers are saved from the acute economic distress due to waiving of loan :s.6 , crores has been Binimum support price is generally available only for wheat and rice, the commission for agricultural costs and prices recommends minimum support prices 5B0#6 for 2? crops. :emunerative

of their farms in an environmentally sustainable manner.

marketing should be ensured to the small farmers to end agrarian despair and distress. -e are now importing large quantities of pulses and oil seeds without duty. "f helped properly, appropriately four crore farmers will produce them at lower cost. :emunerative price for farm produce is the most effective step to make loan waiver history steps should be taken to restart their agricultural life of all those who have taken loans from money lenders and traders. 0mart cards should be distributed to enable them to get the essential inputs like seeds and fertili7ers. The gramsabha can be entrusted with the task of identifying such farmers. Transparency should be followed to enable them to enhance farm output and achieve the goal of ? percent growth in agriculture. The %ommissioner for *griculture costs and prices 5%*%#6 needs to review its parameters to determine the minimum support price. The %*%# determines the

be done without lifting the rural "ndia in dup and continuing distress.

B0# by assuming that farmers will get (1/ profit over and above the cost of production. The cost of production has gone up and an emphasis on fertili7ers and insecticides will only mean higher costs. The %*%# does not take into account calamites like drought while determining the B0#. There should be a profit margin of 1 percent over and above the cost of production. #roper measures should be taken to lift the rural "ndia in =conomic distress. =conomic harvest cannot