Recent discussions in Indian agriculture have intensified around the implementation of a legal guarantee for the Minimum Support Price (MSP). This comes in response to ongoing farmer protests and demands for better financial security. The Parliamentary Standing Committee on Agriculture has made several recommendations aimed at improving farmers’ welfare. These recommendations seek to address the pressing issues faced by farmers, including financial instability and environmental concerns.
Legal Guarantee of Minimum Support Price
The committee advocates for a legally binding MSP to provide financial stability for farmers. This measure aims to reduce farmer suicides and alleviate market volatility. A guaranteed MSP would allow farmers to plan their production without fearing market fluctuations. It aligns with national food security goals by ensuring stable food prices. The committee believes that the benefits of a legal MSP far outweigh the potential challenges.
Compensation for Stubble Disposal
To combat environmental issues from crop residue burning, the committee recommends compensating farmers for managing paddy stubble. This initiative aims to reduce pollution during winter months, particularly in northern India. The Punjab government has proposed a bonus to support farmers in this effort.
Increasing PM Kisan Support
The committee has suggested doubling the financial support under the PM-KISAN scheme from ₹6,000 to ₹12,000 annually. This increase aims to provide better financial assistance to farmers, tenant farmers, and agricultural labourers. The committee brought into light the rising costs of living in rural areas, which have outpaced income growth, leading to increased borrowing among families.
Debt Waiver for Farmers
In light of rising farmer distress, the committee proposed a debt waiver scheme for farmers and farm labourers. The percentage of rural families taking loans has increased , indicating heightened financial pressure. The committee emphasises the need for targeted interventions to help farmers manage their debts sustainably.
Increasing Budgetary Allocations
The committee stressed the importance of increasing budgetary allocations for agriculture. Despite higher absolute figures in recent years, the percentage share of agriculture in the total central plan has declined. This trend is concerning, especially given the declining growth rate of the agricultural sector.
Other Recommendations
Additional recommendations include implementing universal crop insurance for small farmers and establishing a National Commission for Minimum Living Wages for farm labourers. The committee also suggested renaming the Department of Agriculture and Farmers Welfare to reflect a broader focus on farm labourers’ rights.
Questions for UPSC:
- Critically analyse the impact of the legal guarantee of Minimum Support Price on rural economic stability in India.
- Explain the significance of increasing budgetary allocations to agriculture in the context of India’s economic growth.
- What are the implications of rising indebtedness among rural families? Discuss with suitable examples.
- What is universal crop insurance? How does it benefit smallholder farmers in India?
Answer Hints:
1. Critically analyse the impact of the legal guarantee of Minimum Support Price on rural economic stability in India.
- A legally binding MSP would provide farmers with consistent income, reducing financial uncertainty.
- It can decrease farmer suicides and improve mental health by alleviating stress related to market fluctuations.
- Guaranteed prices encourage investment in agricultural practices, leading to enhanced productivity and sustainability.
- Stable food prices contribute to national food security and support public distribution systems.
- The overall economic activity in rural areas could be stimulated, benefiting local businesses and economies.
2. Explain the significance of increasing budgetary allocations to agriculture in the context of India’s economic growth.
- Increased budgetary allocations can enhance agricultural productivity and growth rates, which are crucial for rural economies.
- Higher funding can support infrastructure development, research, and technology adoption in agriculture.
- It addresses the declining share of agriculture in the total central plan, which has implications for food security.
- Boosting agricultural investment can create jobs and reduce poverty in rural areas.
- It can help mitigate the adverse effects of climate change on agriculture by funding sustainable practices.
3. What are the implications of rising indebtedness among rural families? Discuss with suitable examples.
- Rising indebtedness leads to increased financial pressure, often resulting in farmer distress and suicides.
- Families may resort to borrowing for daily expenses, indicating a mismatch between income and expenditure.
- For example, the NABARD survey showed a rise in rural families taking loans, reflecting worsening financial health.
- Indebtedness can limit farmers’ ability to invest in their agricultural practices, affecting productivity.
- It creates a cycle of debt, where farmers struggle to repay loans, leading to further borrowing and economic instability.
4. What is universal crop insurance? How does it benefit smallholder farmers in India?
- Universal crop insurance provides coverage for smallholder farmers against losses due to natural disasters or crop failure.
- It reduces the financial risk associated with farming, allowing farmers to recover from losses and continue their operations.
- Insurance can encourage investment in better farming practices and technologies, as risks are mitigated.
- It supports food security by ensuring that farmers can maintain production levels despite adverse conditions.
- Universal coverage ensures that even the most vulnerable farmers have access to financial protection, promoting equality in agricultural sustainability.
