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Issue No.: 576 | June 2015

Agriculture and Rural Indebtedness - VIII

R. M. Mohan Rao
Freedom from British Rule did little to improve the lot of the farmer. This is so even today 67 years after Independence.

In this, the VIII part of the series on the indebtedness of  farmers, Professor Mohan Rao continues the discussion on farmers’ participation in development programmes and various policy initiatives such as the role of the State vis-a-vis Indian agriculture, the phenomenon of rural indebtedness, rural credit and the nature of safety nets to deal with risks and uncertainties.

Policy Initiatives

8. Reforms of extension system

  • Farming in India in general and small farm agriculture in particular is a diversified activity with farm and off-farm pursuits. This calls for a holistic approach towards farm as well as farm households’ activities covering aspects such as nutrition, food security, sustainability, risk minimization, income and employment generation and marketing strategies of farm and off-farm products. Viewed from this perspective, a farming system approach to extension is suited in Indian conditions.

  • Multi-Agency approach to public extension is desirable for expansion of coverage. But effective measures should be taken for better coordination to avoid wastages and for reasons of accountability. Similarly, private sector extension through farmers’ organizations, SHGs and farmers’ interest groups is desirable for better acceptance of the guidance offered.

  • Though utilization of para-extension workers helps to ease the stress on the public extension system, extension through input suppliers and dealers who are not trained for the purpose are more inclined only to push their product brands. This is evident from the experience in suicides of cotton farmers in Andhra Pradesh during 199798. This has to be curbed.

  • Private sector extension with focus on profits particularly involving input suppliers and dealers and corporate sector gravitate towards betterendowed regions and farmers. In view of this, the State has to continue to play a central role in technology dissemination with a focus on economically backward regions, landless, marginal and small farmers likely to be untouched for reason of poor profitability by the corporate houses.

  • Media has emerged as a major source of information to the rural people and this must be used much more extensively than at present to disseminate extension through support from government for a separate channel for agricultural extension in regional languages on radio and TV.

  • The Extension system has to be recast with a focus on gender and marketing issues, in thecontext of the agro climatic and socio-economic diversity of the country.

9. Marketing

Agriculture marketing is an area waiting for thorough revamping. The urgency for such action is all the more in the changed context of liberalization. The following steps are suggested:

  • Freedom and Liberalization for all, except farmers, sounds odd, irrational and unjust. Farmers must be given freedom to transport, process and sell their product according to their will, if government really wants them to be equal partners in the country’s development.

  • Steps must be taken to provide marketing extension services, together with measures for more effective dissemination of market arrivals, and prices at different trading centers similar to stock exchange news. A toll-free market intelligence service is the need of the hour.

  • Greater use of electronic media for creating awareness and motivating farmers in marketing practices, like proper grading, handling and packaging of products at their level for obtaining better prices.

  • Creation of a price stabilization fund for select commodities which are volatile to market fluctuations and putting an end to ad hoc market interventions in export of agricultural commodities with proper price stabilization mechanism deserves serious attention.

  • Post harvesting credit is crucial to avert distress sale and loss of price particularly among the marginal and small farmers. Credit against warehouse receipts is totally absent. Traders are given pledge-credit against goods stored in their premises while farmers are denied the same facility. These discriminatory policies need to be reversed.

  • Market access calls for proper connectivity. With more than one half of the villages not connected with pucca all weather roads, and 41 per cent of villages without telephone facilities are examples of how not to prepare farmers for global trade! This calls for corrective measures.

  • Even private agencies can be encouraged to procure farm produce on the lines of the FCI.

10. Reforms in the social sector and farmer’s participation

Social sector: In the light of the poor state of social infrastructure like education and health in the countryside the following interventions deserve attention.

  • The quality of primary education offered in government schools must be improved with due attention to physical access, to ensure participation of all children.

  • At the secondary stage, the introduction of vocational subjects like agriculture, communication and dairying helps rural youth to acquire the requisite knowledge and skills.

  • Educational loans must be extended to farmers’ children on par with their urban counterparts.

  • Ensuring improved rural water supply, which goes a long way in preventing water-borne diseases, needs priority in rural development programmes.

  • Over-emphasis on curative aspect of health care without due attention to preventive and promotional aspects has had an adverse impact on public health, particularly in the countryside. Greater attention must be paid to improve this aspect of health care facilities in this regard.

  • A separate scheme of rural health insurance with group insurance concept is essential for coverage of farmers’ groups at reduced premia where such plans are already there.

  • Institutional credit should also take into account the consumption needs, education of children, health and social expenditure.

  • Insurance limit under KCC be revised upwards to Rs.1 lakh and must be extended even after the loan period.

  • Special health insurance scheme for small and marginal farmers with provision for waiver in case of death should be explored.

11. Farmer’s participation

In view of the significance of farmer’s participation for accelerated development of farm sector, the following is suggested:

  • Administrators look at participation as people’s involvement in the implementation of development projects or programmes, which generally comprise components like contributing labour or finances and participation in group activity to carry out the pre-determined decisions of the government. This concept of participation is lopsided and people must be involved at all stages of the project or programme right from the stage of decision making planning etc., with due weightage to their concerns.


To conclude, in the final analysis, in the post-reform era, the agricultural sector has to compete in an integrated world economy. This calls for reversal of many past policies and new initiatives to bring about parity between agricultural and industrial sectors and a recognition that private investment is not forthcoming since it is not paying and therefore public investment should continue as the majority of the vulnerable farmers who cannot be left in the lurch owing to market forces. Towards this end, the State must clearly redefine its role vis-à-vis the agricultural sector.

PROFESSOR R. M. MOHAN RAO, retired NABARD Chair, Waltair, Andhra Pradesh. The purpose of serialising his Paper is to invite readers to share their views on the issues raised and recommend policies that would ensure a fair deal for India’s farmers.

With this, we conclude the series on indebtedness of farmers. The full text of the VIII-part series is available at the office of Freedom First. You can write / email  / telephone us and we shall post you a copy.






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Tribute to S. V. Raju

Nurturing a Tradition

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Fond Reminiscences of our dear Editor ...


Raju and Freedom First

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Remembering Raju

Firoze Hirjikaka

Guntur Remembers Raju


Tribute to S. V. Raju



The National Scene

NDA’s Management of the Economy – More of the Same

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Agrarian Crisis – Rural Distress – and All That

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Rahul Resurgent

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The Year That Was ...

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The Rural Perspective

Agriculture and Rural Indebtedness - VIII

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Point Counter Point : Every issue has at least two sides


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Being Salman Khan

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Farmers’ Suicides

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Foreign Relations in the 21st Century

Modi Goes to China: Development at Home and Peace on the Border

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ISIS - A New Threat

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Dawood’s Return?

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Swastika: Whose Symbol Is It Any Way?

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The Swatantra Party in Gujarat - A Historical Perspective

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