The importance of agriculture in the Indian economy, in terms of providing livelihood opportunities to 650 million of its population and raw material for a large number of its industries, cannot be overstated. For the Indian economy to maintain its growth momentum on a sustainable basis, the agriculture sector would have to play a more important role than it has in recent years. The actual growth in the agriculture sector during the first four years of the 10th Five Year Plan has averaged only about 2% per annum as against 4% per annum as envisaged during the Plan period (2002-07). While the share of agriculture GDP in the overall GDP has declined from around 35% in 1980-81 to around 18% at present, the fall in the proportion of population dependent on the sector has been insignificant from 70% to 66% only. The rapidly worsening ratio between the rural per capita income from farm and non-farm sectors is causing serious concern. While a majority of the workforce is still dependent on agriculture, the GDP growth rates in agriculture is marginally above the rate of growth of population, in contrast to the high growth in the non-agricultural sector. Secondly, growth has been uneven across regions and crops. Thus, despite achieving self-sufficiency in food grains production at the national level and technological advancements in agriculture, starvation deaths and suicides continue to plague a large section of the farming community in different parts of the country.
Though agricultural credit data on paper is impressive, the small and marginal farmers are unable to access credit easily. There is excessive lending to the agricultural sector in metropolitan areas indicating that indirect lending for agriculture has gone up for activities such as warehouses, cold storages, irrigation, rural electrification etc. There is evidence that the same set of credit worthy farmers are availing of credit with new borrowers still struggling to secure credit. The GOI’s loan waiver schemes and concessional interest schemes tend to benefit farmers who have access to bank credit and have further enhanced flow of credit to the non-defaulting farmers! These are typically large and medium farmers with multiple income sources, not relying wholly on risk-prone crop credit. Small and marginal farmers should be helped to liberate themselves from the stranglehold of moneylenders and should be given priority for accessing low cost credit through KCC mechanism. Farmers suicides have also come down drastically especially among cotton growers, largely due to the excellent pest free transgenic Bt cotton seeds which have reduced crop failures and not so much due to improved access to institutional finance. The recent crisis in micro finance would only reduce accessibility to credit sources for the small and marginal farmers. If financial inclusion is relevant, the Central/State Governments must ensure that all farmers especially the small and marginal ones, get priority access to cheap farm loans and not the better-off farmers who are able to access institutional credit more easily.
Accordingly, NABARD has experimented and successfully demonstrated various approaches in addressing the key issues indicated above.
E-sagoo (Hyderabad, AP) –for pathological investigation of cotton crops
E-kutir -(Nayagarh, Orissa)-for advice on integrated agricultural inputs,
market data &
Credit E-chaupal (M.P., Chattisgarh etc) for market prices and rates.
Reuters Lite (Maharashtra) for advice on crop weather and market data,
India achieved self-sufficiency in food grains in the 1970’s and has sustained it since then. Yet the concerns about the low per capita food energy intake and non fulfilment of basic nutritional requirements of a large percentage of the population have kept the issue on food security alive even today. Apart from the issues related to agricultural credit flow discussed above, the country today also has to contend with issues like lack of adequate storage for food grains, degradation of natural resources and climate change and its attendant problems. All these problems have to be attended to comprehensibly if agricultural development is to be carried out on a sustainable basis.