2015: The Year of Rural Distress ?

Discussion in 'Economy & Infrastructure' started by Singh, May 19, 2015.

  1. Singh

    Singh Phat Cat Administrator

    Joined:
    Feb 23, 2009
    Messages:
    20,305
    Likes Received:
    8,270
    Location:
    011
    @Sakal Gharelu Ustad @Mad Indian @pmaitra @NSG_Blackcats

    Few links :

    The ministry of agriculture projected that foodgrain production of cereal and pulses was likely to decline by 5.3% in 2014-15
    http://www.livemint.com/Politics/TkKaRlSes4GxHCbGz30RLP/Indias-rural-distress-set-to-worsen.html

    Chhattisgarh report: How Modi government's new approach is undermining a decade of gains in rural India
    http://scroll.in/article/727633/one...as-washed-away-a-decade-of-rural-indias-gains

    India's shocking farmer suicide epidemic
    http://www.aljazeera.com/indepth/fe...-farmer-suicide-epidemic-150513121717412.html

    Tractor sales: Mirroring the rural distress
    http://indianexpress.com/article/in...les-mirroring-the-rural-distress/?SocialMedia

    Consumer goods production growth falls to lowest in two decades
    http://www.livemint.com/Money/HcrvP...ction-growth-falls-to-lowest-in-two-deca.html
     
  2.  
  3. Sakal Gharelu Ustad

    Sakal Gharelu Ustad Detests Jholawalas Moderator

    Joined:
    Apr 28, 2012
    Messages:
    6,682
    Likes Received:
    6,663
    Yes, tough season ahead. First the rains and hail in March-April and now El-neno. So poor monsoon most probably.

    Definitely the farm production is going to take a hit.
     
  4. Singh

    Singh Phat Cat Administrator

    Joined:
    Feb 23, 2009
    Messages:
    20,305
    Likes Received:
    8,270
    Location:
    011
    What do you think the response of State and Central Govt be ?

    What about Social Security Schemes ?
     
  5. Sakal Gharelu Ustad

    Sakal Gharelu Ustad Detests Jholawalas Moderator

    Joined:
    Apr 28, 2012
    Messages:
    6,682
    Likes Received:
    6,663
    It is high time that farmers should be made to pay for some insurance. India is a big agricultural market and unless monsoon fails big time, it is very unlikely that whole country will be hit by same shock. For eg. the unusual rains in March/April affected north India but not other parts. So, it is very easy to insure farmers. This scheme should be rolled out on a massive scale. But I see few upfront problems:

    1) Land records. If govt. has the land records it can set the premium easily. But since land records are not so well done, farmers should be allowed to buy self insurance. This is a better way of doing it. It is also important to have land record to separate out the big vs small beneficiaries. Usually govt. pay out same relief for everyone. But allowing more relief for bigger farmers will give an incentive for getting higher premium from them.

    2) Identification of crop loss: It is not so well developed in India. But once you match land records with satellite data, it becomes much easier to assess crop loss.

    But both these things should go together to get best outcome. Insurance can be made popular even in the short run. But this should be the goal and govt. should lay out this roadmap.

    Now coming to short term measures. What can govt. do right now? It should not cut down on social security schemes already in place for this year at least. MNREGA is hated by everyone but it is a decent self-selection mechanism. This helps in more targeted distribution of aid. If people in certain region are poor and hit more by shock, they will demand more employment. I think states that are going to be hit more by monsoon shock should roll out MNREGA funds.

    Govt. can also restrict import of certain crops if it believes that would negatively impact the prices. Low output also means higher prices for many crops, so restricting some imports can help there. But usually such practices are not good because govt. does not know when to roll back specific scheme. It also allows vested interests to make windfall profits. So, I think direct money transfer through Aadhar is the best short-term solution and till it is not implemented, MNREGA should do the job.

    It is a shame that even though India has such a diversified portfolio of agriculture and other activities, we still cannot insure seasonal shocks. Not to forget, that most land in India has 2-3 sowing per year as compared to other countries with 1 crop every year. So, weather risk is not so big in India.
     
    pmaitra likes this.
  6. pmaitra

    pmaitra Moderator Moderator

    Joined:
    Mar 10, 2009
    Messages:
    31,663
    Likes Received:
    17,159
    Location:
    EST, USA
    Some important excerpts:

    Is there a way to regulate these local money lenders? The loans should be insured, not collateralized. However, if the debtor approached a regulated bank, he probably won't qualify, which is why he was forced to approach a private money lender.

    One solution is to get these farmers to lease out their land to other entities. Now, the question is, is there at all a demand for his land?

    Assuming there is indeed demand, it should be possible for the farmer to lease out his land to someone who is willing invest in that land without risking his own life.

    Assuming there is no demand, why is his land even subject to auction?

    Is it true that is the debtor dies, the debt is transferred to his kith and kin? The land might have been in the name of the farmer who died, but there should be a safeguard against eviction and appropriation, since, the land is the only livelihood of the family. It is time to see whether Modi is a people's politician (as one eponymous thread title suggests), or a banker's politician.

    I believe it was @Mad Indian who argued that is a person leaves a certain job, there will be someone else ready to take his position, and the person who leaves the job, will be able to find a better job. This, however, leaves out one aspect. If there is lack of supply of labour forcing people to buy tractors, then why are some people not taking up the job of a labourer, and instead, taking loans, and sometimes, committing suicide? Is it true that the lack of labour supply and debt-trapped farmers are geographically skewed?


    Economy cooling?

    If there is less demand for consumer goods, then the price of consumer goods will fall. Which means the value of each currency unit goes up (or in this case, does not dwindle as much as it is expected to).

    Overall, all I can say is that the theory of "trickle down effect" is not working satisfactorily. The government needs to stem this disaster in the making. This is fertile ground for an uprising.
     
  7. NSG_Blackcats

    NSG_Blackcats Member of The Month OCTOBER 2009 Senior Member

    Joined:
    Jul 23, 2009
    Messages:
    3,485
    Likes Received:
    1,548
    Location:
    Delhi
    Here are some steps already taken by GoI.

    Increased farm credit by 50,000 crore (target set at 8.5 lakh crore for 2015-16)

    http://www.dnaindia.com/money/report-budget-2015-centre-raises-farm-credit-target-to-rs-85-lakh-crore-for-2015-16-2064962

    Increased compensation: Threshold for compensation increased from 50% crop loss to 33%, amount increased by 50%.

    http://www.ndtv.com/india-news/in-big-relief-for-farmers-pm-modi-announces-more-compensation-for-crop-damage-753168

    Banks were directed to restructure the loans taken by farmers.

    http://www.hindustantimes.com/india-news/pm-modi-announces-higher-aid-for-farmers-hit-by-unseasonal-rains-hailstorm/article1-1335002.aspx

    1. Allocation for the micro irrigation and watershed development schemes have been increased to 5300 crore from 1000 crore.
    2. Rural Infrastructure Development Fund (RIDF) set up in Nabard – Allocation 25,000 crore
    3. Long Term Rural Credit Fund – Allocation 15,000 crore
    4. Short Term Cooperative Rural Credit Refinance Fund - allocation 45,000 crore and
    5. Short Term RRB Refinance Fund - 15,000 crore
    http://www.thehindubusinessline.com/economy/budget/irrigation-water-efficiency-to-drive-yield/article6946006.ece




     
    Vishwarupa and pmaitra like this.
  8. NSG_Blackcats

    NSG_Blackcats Member of The Month OCTOBER 2009 Senior Member

    Joined:
    Jul 23, 2009
    Messages:
    3,485
    Likes Received:
    1,548
    Location:
    Delhi
    Another problem with farming is crashing of commodity prices across the world.

    Sugar, rubber, rice .. are few of the commodities whose price is falling..so adding value chain might be one of the solution. So mega food parks like the one in tumkur (Karnataka) might help. GoI is planning 17 such mega food parks across India.

    http://www.ifppl.com/index.php/meg-food/-mega-food-park-scheme.html
     
  9. Mad Indian

    Mad Indian Proud Bigot Veteran Member Senior Member

    Joined:
    Jan 27, 2012
    Messages:
    12,830
    Likes Received:
    7,523
    Location:
    Podigai Hills.
    Guys the best thing to do is also the hardest thing to do- doing nothing. But more than that, there needs to be reform in the present land laws and registrations where agri lands are not allowed for sale or use for commercial purposes. Remove it. It will cause a few years of chaos but soon it will prove to be a very good long term solution to farmer suicides- by giving them opportunity to move out of farming sector.


    Any subisidy or insurance by govt(which again would only mean subisidy through indirect means ) would only slow down the decline of farming . seriously we have too many farmers and slowdown of decline in farming is the last thing we want.
     
  10. Rowdy

    Rowdy Co ja kurwa czytam! Senior Member

    Joined:
    Sep 6, 2014
    Messages:
    3,256
    Likes Received:
    2,959
    Location:
    Milky Bar

    .................................................................................
     
  11. NSG_Blackcats

    NSG_Blackcats Member of The Month OCTOBER 2009 Senior Member

    Joined:
    Jul 23, 2009
    Messages:
    3,485
    Likes Received:
    1,548
    Location:
    Delhi
    How irrigation played a important role in cotton production of two states who shares borders. Please note, my limited point is irrigation not X Vs Y. If you study the boom in agriculture production in MP, you will see how irrigation played an important role. So those opposing land bill should think about it?

    How Gujarat Beats Maharashtra In Cotton Irrigation

    [​IMG]

    [​IMG]
     
  12. Rowdy

    Rowdy Co ja kurwa czytam! Senior Member

    Joined:
    Sep 6, 2014
    Messages:
    3,256
    Likes Received:
    2,959
    Location:
    Milky Bar
    Modi must have used fascist math to change and manipulate numbers just like GDP and growth rate numbers.
     
  13. NSG_Blackcats

    NSG_Blackcats Member of The Month OCTOBER 2009 Senior Member

    Joined:
    Jul 23, 2009
    Messages:
    3,485
    Likes Received:
    1,548
    Location:
    Delhi
    Wheat Procurement surpasses last year’s mark by 5 lakh MT

    Wheat procurement by government agencies during current Rabi marketing season has crossed the last year mark. It is 5 lakh MT more than last season’s procurement. Till May 6th this season 267,06,313 MT wheat has been procured by the government agencies in various wheat growing states, while during last season it was 262,86,152 MTon the day.

    In order to give relief to the farmers affected with unseasonal rains and hailstorms, the Government had relaxed quality norms for wheat procurement and also decided to bear value cut , if any imposed for shrivelled, broken and luster lost grains, so that farmers get full Minimum Support Price(MSP) for their produce.

    Punjab has procured over 98.66 lakh tonnes of wheat this season, while neighbouring Haryana has surpassed its procurement target for the season by procuring 67.55 lakh tonnes.
     

Share This Page