Agrarian Distress in India Problems and Remedies

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About the Author B.C. Barah, Dr. Barah is principal scientist (Economics) at National Centre for Agricultural Economics and Policy Research (NCAP). Experience of working in various institutions of repute including the Assam Agricultural University, International Crops Research Institute for semi arid & topics (ICRISAT), Central University of Hyderabad, NABARD, Cornell University, Duke University, (USA), IRRI, (Manila), Asian Productivity Organisation (Tokyo), NIPFP, NAIP and NFSM is asset to him. Dr. Barah has a high class Ph.D. degree in the applied econometrics and environment economics. Dr. Barah published more than eighty research papers in local, national and international journals, twenty technical reports/bulletins, six books, policy brief and policy papers. He participated widely as member of several policy forums, high powered committees both at the government and the CSO level. He is awarded the prestigious NABARD Chair Professorship. He supervised number of research students leading to M.Phil and Ph.D degree.

Smita Sirohi, Dr. Smita Sirohi is Principal Scientist, in the discipline of Agricultural Economics, at National Dairy Research Institute (NDRI), Karnal (Haryana). She has been actively engaged in research and teaching in the area of dairy economics. She had a brief period of serving at National Centre for Agricultural Economics and Policy Research (NCAP), New Delhi. She has guided a number of Masters and Ph.D. students, authored many research papers, book chapters, popular articles, review papers and has also written two books.

Introduction Agriculture, the most important sector in Indian economy, is presently at a cross road. Although, the share of agriculture in the national GDP has decreased to 18 per cent in 2007, yet the sector continues to provide livelihood support to more than two-thirds of the total population in India. The slow down in performance of the sector during the past couple of decades is a cause of concern in the overall agenda for food and income security. The aggregate productivity has been low, growth of production decelerating and more importantly, the sector is exposed to risk and uncertainty. More than 80 per cent of the farmers, mostly with marginal and small holdings, depend on agriculture as the primary activity and are highly vulnerable to multiple risks. The downtrend in growth of total factor productivity (a measure of contribution of technology) has increased the vulnerability and induced un-sustainability in farm income. At the same time, the escalating cost of production and un-remunerative prices have made farming increasingly unviable. Although, the sector has to gear up to achieve the targeted 4 per cent growth in the 11th Five-Year Plan, there seems to be a silent but widespread unrest and distress at the farm level. The gap between growing aspiration and shrinking achievement in farming has been increasing. While the expectations have grown leaps and bound, the achievements of farm enterprises lagged behind the required pace due to a variety of factors, which have aggravated the state of imbalance. Moreover, the inability to break the yield barrier has accentuated frustration and farmers' distress.

Several factors have contributed to the imbalance, of which the low agricultural productivity and its stagnation are notable. Among the supply side factors, declining factor productivity, degradation of soil and water resources due to intensive agriculture, inequitable access to input and imperfection in output market are prominent. The combined effect of these factors has resulted in escalation of the cost of production, low and uncertain production and falling farm income. The failure of the farming sector to absorb the rapidly growing pool of manpower in rural areas has also caused the decline in household income to add fuel to fire in the distress scenario.

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