Relevance : GS Paper III (Indian Economy)
[1000 words reduced to 150]
- Recently, thousands of farmers held protest in Delhi.
- Demands of farmers:
- debate in Parliament on farm distress;
- one-time loan waiver; and
- raising MSPs and making them legally binding on private traders
- Rationality of these demands:
- debate would help understand and address farm distress better
- loan waivers will largely help the well-off farmers, and will also hit public investments in agriculture adversely
- an MSP formula based on just cost and ignoring demand would be inefficient
- making MSP legally binding will turn out to be anti-farmer as it will discourage private traders
- Way forward
- need of reforms in agri-markets
- encouraging contract farming, futures trading, etc.
- investments to improve the functioning of markets
- thinking of a sustained income support for farmers.
- financial inclusion of small and marginal farmers
- implementation of PM’s AASHA by state govts.
- Quick fix of loan waivers is not a solution of farm distress.