SC Panel Report on Agriculture Distress | 13 Dec 2024

Source: DTE

Why in News?

Recently, the Supreme Court (SC)-appointed committee has submitted its interim report on agrarian distress in India. The report has highlighted the severe state of crisis in India's agriculture.

What are the Key Findings of the SC Committee Report on the State of Agricultural Farmers?

• Income Crisis: The report finds that farmers earn a mere Rs 27 per day from agricultural activities, highlighting the stark poverty within the sector. 
  • The average monthly income of agricultural households is Rs 10,218, which is far below the basic living standards required for a decent life.
• Escalating Debt: Farmers in Punjab and Haryana are burdened with mounting debts, with institutional loans reaching Rs 73,673 crore and Rs 76,630 crore, respectively, in 2022-23.
  • Non-institutional debt adds to the burden, accounting for 21.3% in Punjab and 32% in Haryana, causing widespread financial distress and pushing many farmers to despair.
• Farmer Suicides: Since 1995, over 4 lakh farmers and farm workers in India have committed suicide, according to the National Crime Record Bureau (NCRB). 
  • A house-to-house survey conducted by three public sector universities in Punjab recorded 16,606 suicides between 2000 and 2015, primarily among small and marginal farmers and landless workers, with high indebtedness being the major cause.
• Stagnation in Agricultural Growth: Punjab and Haryana have experienced stagnation in agricultural growth, with annual growth rates of 2% and 3.38%, respectively, from 2014-15 to 2022-23, significantly below the national average. 
  • This stagnation has contributed to low income levels and declining living standards for farmers.
• Disproportionate Employment: The report highlights that 46% of India's workforce is employed in agriculture, yet it contributes only 15% to the national income.
  • Many agricultural workers are underpaid or face disguised unemployment, worsening rural poverty.
• Impact of Climate Change: Depleting water tables, droughts, erratic rainfall, and extreme weather conditions are aggravating the crisis, further threatening food security and agricultural productivity.

What are the Implications of the Findings of Report?

• Impact on National Economy: The declining state of agriculture, along with high suicide rates and increasing debt, poses a significant threat to the nation’s economy. 
  • Neglecting agriculture could lead to long-term economic instability and increase rural-urban migration.
• Sustainability and Food Security: If the current trajectory continues, India’s agricultural sector could face a crisis in terms of food security. 
  • With decreasing agricultural productivity, climate change challenges, and a lack of reform, India may struggle to meet the growing demands for food, further exacerbating poverty and hunger in rural areas.
• Social Stability: The persistent farmer suicides and growing despair within the farming community could also lead to social unrest.

What are Major Challenges Faced by the Agricultural Sector in India?

• Limited Access to Credit and Finance: As per India's Agriculture Census 2015-16, around 86% of Indian farmers are small and marginal, and many face significant challenges in accessing institutional credit. 
  • This limits their ability to invest in modern farming inputs like machinery, seeds, and fertilizers, affecting productivity.
• Fragmented Landholdings: The average landholding in India is around 1.08 hectares, which is insufficient for large-scale, efficient farming. 
  • This makes it difficult for farmers to adopt modern agricultural techniques and technologies. The lack of economies of scale results in lower agricultural output and productivity, contributing to financial instability.
• Outdated Farming Practices:  A large number of Indian farmers still depend on traditional farming techniques that are inefficient and unsustainable. 
  • The lack of access to modern technology and resistance to change further obstruct improvements in farming productivity and sustainability.
• Water Scarcity and Irrigation: India’s agriculture relies heavily on monsoon rainfall, with 60% of cropped area being rainfed, making it vulnerable to droughts and erratic rainfall. 
  • According to NITI Aayog's data for 2022-23, only 52% of India's gross sown area (73 million hectares) is irrigated, exacerbating water scarcity.
• Soil Degradation and Erosion: The Food and Agriculture Organization (FAO) reports that nearly 30% of India’s agricultural land is affected by soil degradation, primarily due to excessive chemical fertilizer use, poor irrigation practices, and deforestation. 
  • This leads to reduced soil fertility, lower productivity, and increased vulnerability to pests and diseases.
• Inadequate Agricultural Infrastructure: India faces 15-20% post-harvest losses due to insufficient storage, cold chains, and rural road infrastructure according to the Indian Council of Agricultural Research (ICAR)). 
  • This increases production costs and limits farmers' access to markets, hindering fair price realization.

What Can be Done to Reduce Farmer Distress in India?

• Loan Waivers: Debt relief for farmers, including a loan waiver, as an immediate measure to alleviate their financial distress. 
  • This would help in reducing the crushing burden of debt, which is one of the primary reasons behind farmer suicides.
• Legal Recognition of MSP: The Supreme Court-appointed panel has also recommended granting legal recognition to the Minimum Support Price (MSP) to protect farmers from market price fluctuations. 
  • This would guarantee farmers a fixed price for their produce, ensuring income stability and reducing uncertainty in the agricultural sector.
• Promotion of Organic Farming and Crop Diversification: There is a need to promote organic farming and crop diversification to reduce dependency on a few staple crops.
  • This would ensure sustainability  and would also reduce the environmental impact of conventional farming practices.
• Agricultural Marketing Reforms: To improve the efficiency of agricultural markets, reforms in the agricultural marketing system are needed which could include measures such as establishing more farmer-friendly markets, reducing intermediaries, and improving infrastructure for better price realisation for farmers.
• Employment Generation in Rural Areas: To address low agricultural income, policies must focus on creating employment opportunities in rural areas, promoting diversification and sustainable development.
  • This could include skill development programs, rural industrialization, and promoting agro-based industries.
• Climate Resilience Measures: There is a need for urgent measures to address the impact of climate change on agriculture, including better water management practices, promoting drought-resistant crops, and investing in climate-resilient infrastructure.