Explain the problems of 'farmer's indebtedness' and suggest any three measures to overcome it. + 3 = 5
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Farmer indebtedness arises from informal credit, crop failures, low prices, and high costs. Solutions: institutional credit, crop insurance, and income support through MSP and direct benefit transfers.
Step 1: Introduction to Farmer's Indebtedness.
Farmer's indebtedness refers to the situation where farmers accumulate debts that they are unable to repay due to various reasons, leading to financial distress and economic hardship.
Step 2: Problems of Farmer's Indebtedness.
High dependence on informal credit: Moneylenders charge exorbitant interest rates (24-60%)
Crop failures: Due to erratic monsoon, droughts, floods, pests
Low and fluctuating prices: Often below MSP, exploitation by middlemen
High input costs: Rising prices of seeds, fertilizers, pesticides
Asset depletion: Farmers sell land, livestock to repay debts
Inter-generational debt: Debts passed from one generation to next
Social and psychological consequences: Stress, depression, farmer suicides
Step 3: Three Measures to Overcome Farmer's Indebtedness.
Institutional Credit Access: Expand Kisan Credit Card coverage, simplify loan procedures, provide timely and adequate credit at low interest rates through banks and cooperatives.
Crop Insurance: Strengthen Pradhan Mantri Fasal Bima Yojana (PMFBY) with timely claim settlement, affordable premiums, and coverage of all farmers.
Income Support and Price Assurance: Ensure MSP for all crops, direct income support (PM-KISAN), promote farmer producer organizations (FPOs) for better market access.
