Introduction:

Agrarian distress refers to the severe challenges faced by farmers, including low crop yields, fluctuating agricultural produce prices, high input costs, indebtedness, and a lack of access to credit. These issues have led to widespread discontent and economic hardship in rural areas.

Causes of Agrarian Distress:

1. Declining Average Size of Farm Holdings:
   • The rising population pressure on land has led to a decrease in average farm sizes, currently at 1.15 hectares. Since 1970-71, there has been a steady decline in landholdings. Small and marginal farmers (less than 2 hectares) account for 72% of landholdings, limiting their bargaining power and economies of scale.
2. Natural Calamities:
   • Rising temperatures, floods, and excessive rainfall significantly damage crops, reducing yields. For instance, in 2020-21, several states faced floods that damaged crops like paddy, maize, and soybean.
3. Declining Agricultural Productivity:
   • The average yield of key crops like wheat and rice has stagnated or declined, impacting farmer income. For example, the average rice yield fell from 2,748 kg/ha in 2010-11 to 2,436 kg/ha in 2019-20.
4. Increasing Cultivation Costs:
   • The cost of inputs such as seeds, fertilizers, and labor has risen, increasing financial strain on farmers. For example, the average cost of cultivating paddy rose from Rs 1,866 per hectare in 2010-11 to Rs 2,796 in 2019-20.
5. Inadequate Market Infrastructure:
   • Poor market infrastructure and lack of technological advancement hinder production and diversification. Despite initiatives like electronic marketplaces, farmers struggle with market access.
6. Lack of Credit:
   • Many farmers rely on informal credit sources with high-interest rates. The average agricultural loan in 2019-20 was Rs 56,740, insufficient compared to cultivation costs.
7. Undermining of MSP System:
   • The MSP system often fails to secure fair prices for farmers, affecting their willingness to invest in agriculture.
8. Lack of Modern Technology:
   • Limited access to modern farming technologies hampers productivity and efficiency.
9. Fragmented Supply Chain:
   • Large gaps in storage and cold chains lead to significant post-harvest losses, particularly in fruits and vegetables.

Impact of Agrarian Distress:

1. Agricultural Growth Decline:
   • Agrarian distress leads to lower agricultural growth, affecting the overall economy. For instance, agricultural growth dropped from 4.3% in 2019-20 to 3.4% in 2020-21.
2. Slowing Rural Demand:
   • Distressed farmers have reduced earnings and purchasing power, slowing rural demand for goods and services. Rural consumption growth was 1.4% in 2020-21, compared to 2.4% in urban areas.
3. Rise in Bank NPAs:
   • Farmers’ inability to repay loans increases bank NPAs. Agricultural NPAs constituted 17.4% of total banking sector NPAs in 2022.
4. Job Losses in Agriculture:
   • Agrarian distress leads to job losses as farmers downsize or avoid hiring. The number of agricultural workers decreased from 15.3 crore in 2011-12 to 14.5 crore in 2019-20.
5. Increased Migration:
   • Distress forces migration to cities, impacting food security and nutrition. By 2050, over half of India’s population is expected to live in urban areas.

Steps Taken:

1. Minimum Support Price (MSP):
   • Annually announced MSPs ensure farmers receive fair prices, providing a price floor and market stability.
2. Crop and Livestock Insurance:
   • Programs like PMFBY and Weather Based Crop Insurance Scheme protect against crop losses due to natural disasters.
3. Agricultural Credit:
   • Initiatives like the Kisan Credit Card provide affordable credit for crop production and mechanization.
4. Irrigation Facilities:
   • Programs like PM Krishi Sinchai Yojana aim to ensure water availability, enhancing productivity.
5. Micro Irrigation Fund:
   • A Rs 5,000 crore fund under NABARD promotes micro-irrigation to boost agricultural productivity.
6. Market Reforms:
   • Reforms like e-NAM and APLM Act aim to improve agricultural market efficiency and transparency.
7. Direct Income Assistance:
   • Schemes like PM-KISAN provide direct income support to farmers, reducing financial distress.
8. Research and Development:
   • Initiatives like the National Mission for Sustainable Agriculture (NMSA) focus on integrated farming and sustainable practices.