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The various options like Minimum Support Price for about 25 crops, Farm Loan Waiver schemes undertaken by various state governments have failed to alleviate the problem. The Direct Cash/Investment scheme has however fared better and is a prudent scheme.
Farm Loan- waiver schemes are a band-aid solution as Agriculture in India has been facing many issues over a period of time. Many small farmers aren’t eligible for bank credit, making them borrow at exorbitant interest rates from private sources.
However, Loan-Waivers is not a comprehensive solution because
Minimum Support Prices: Price volatility makes life difficult for farmers. MSPs ensure that farmers get a minimum price for their produce in adverse markets.
However, MSPs also have many cons
Direct Cash/Intervention Scheme: This involves the Direct Benefit Transfer (DBT) of the cash to the farmers.
Case Study: The Telangana government’s income/investment support through the Rythu Bandhu Scheme (RBS). Telangana started RBS in May 2018, whereby it gave Rs 4,000 per acre to every farmer. This transfer is made twice a year, coinciding with the two cropping seasons. By directly giving cash, the government aims to support the input purchases of farmers. The scheme is said to have reached almost 93 per cent of landowners.
In terms of costs, estimates show that a national farm-loan waiver is likely to cost about Rs 4 to 5 trillion. An RBS-style income transfer is likely to cost about Rs 2 trillion.
Other reforms along with the direct intervention scheme include
Conclusion:
Through higher MSPs or through loan-waivers, one cannot reach more than 20 to 30 % of Indian farmers. This limited reach, therefore, cannot redress the widespread grievances of Indian farmers. An income transfer scheme for poor farmers based on the Socio Economic and Caste Census (SECC) that has already mapped household deprivation may be the best answer.
By: ABHISHEK KUMAR GARG ProfileResourcesReport error
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