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Only a radical policy shift can lift farmers from widespread distress

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(Source – The Hindu, International Edition – Page No. – 13)

Topic: GS3 – Indian economy – Agriculture
Context
  • The article highlights India’s agrarian crisis, emphasizing budget cuts, farmer suicides, and demands for MSP, loan waivers, and public investment in agriculture and rural employment.

Budget Cuts and Agrarian Distress

  • The last Union Budget reduced food subsidy by ₹7,082 crore and fertilizer subsidy by ₹24,894 crore.
  • Allocations for agriculture fell from 5.44% in 2019 to 3.15% in 2024, despite 1,00,474 farmer suicides between 2015 and 2022.
  • India ranks 105th out of 127 countries on the Global Hunger Index 2024, highlighting severe agrarian distress.

Controversial Farm Policy and Protests

  • The draft National Policy Framework on Agricultural Marketing (NPFAM) reintroduces pro-corporate provisions from the repealed farm laws.
  • Farmers nationwide are protesting against NPFAM, demanding its withdrawal.

Key Demands for Farmers

  1. Statutory Minimum Support Price (MSP):
    • Farmers demand MSP at C2+50% (1.5 times production cost), as recommended by the Swaminathan Commission.
    • Non-implementation of MSP has led to indebtedness, suicides, and distressed land sales.
  2. Reduction in Production Costs:
    • Rising costs of fertilizers, seeds, diesel, and electricity must be reduced.
    • The government should regulate corporate input producers and support public sector firms.
  3. Comprehensive Loan Waiver:
    • A one-time loan waiver for farmers and agricultural workers is essential to prevent suicides.
    • The government has waived ₹14.46 lakh crore of corporate loans in the last decade.
  4. Crop Insurance and Climate Change:
    • A new, farmer-friendly crop insurance scheme is needed to replace the flawed PMFBY.
    • Climate change-induced droughts, floods, and unseasonal rains require robust insurance coverage.
  5. Investment in Irrigation and Power:
    • Public investment in irrigation and power must increase to reduce costs and ensure steady supply.
    • Completing stalled irrigation projects can boost yields and employment.
  6. Expansion of MGNREGA:
    • MGNREGA work-days should increase to 200, with wages raised to ₹600.
    • The scheme is a lifeline for rural workers and boosts purchasing power.

Funding Solutions

  • Impose wealth and inheritance taxes on billionaires, whose numbers doubled from 109 in 2014 to 200 in 2025.
  • Restore corporate tax rates to generate ₹1.45 lakh crore annually.
  • Increase direct taxes on the rich while reducing indirect taxes and curbing tax evasion.

Conclusion

  • Addressing agrarian distress requires MSP implementation, reduced production costs, loan waivers, better insurance, and increased public investment.
  • Funding can come from taxing the wealthy and restoring corporate taxes. 
PYQ:

Q.1 What are the main bottlenecks in the upstream and downstream process of marketing of agricultural products in India? (UPSC CSE (M) GS-3 2022) 

Q.2 What are the main constraints in transport and marketing of agricultural produce in India? (UPSC CSE (M) GS-3 2020) 

Practice Question:  Analyze the causes of India’s agrarian distress and suggest measures to address the challenges faced by farmers, focusing on MSP, loan waivers, and public investment. (250 Words /15 marks)

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