Page 41 - Banking Finance March 2022

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agriculture sector. Marginal and small land holdings face productivity. While the recommended ratio of use of the
a number of issues, such as problems with using NPK fertilizers is 4:2:1, this ratio in India is currently at
mechanization and irrigation techniques. Also, farmers 6.7:2.4:1
cultivating smaller land holdings lands do not have
Y Procurement - Only about 1/3rd the total production
formal lease agreements because of which they become
of the food grains are procured due to long distances
ineligible for formal credit.
to the procurement centres, increasing cost of
Y Insurance: Only about 35 per cent of farmers are transportation for farmers and irregular hours of the
covered under the Pradhan Mantri Fasal Beema Yojana. procurement centres. In such situations, the farmers do
Moreover, due to inadequate and delayed claim not have any option but to sell their produce to
payment, high premium rates, and poor execution, the middlemen with very little or no profit at all.
scheme witnesses a drop of about 17% in the enrolled
Y Poor Mechanisation - The use of agricultural machinery
farmers in 2017-18. in agriculture enables agricultural labour to be used in
Y Irrigation: As 60% of agriculture in India is rain-fed, so other activities. But, the overall level of mechanisation
timely arrival, consistency, and sufficiency of monsoon in India is still less than 50%, as compared to 90% in
rains is most essential. But the high variability of S-W developed countries.
Monsoon rain in India causes a lot of hardship to the Y Lack of Storage Facilities: A robust storage
farmers and puts an adverse impact on the economy. infrastructure is required to minimise any losses due to
For example, due to lack rain, farmers have to rely more adverse weather conditions or in the process of
on irrigation, for which they need diesel. This further transportation.
increases our oil imports and hence increases our
current account deficit. Y Issues with APMC: APMC mandis currently levy a
market fee on farmers which makes it expensive for
Y Credit: The access to timely credit is a critical farmers to sell at APMC mandis. In transporting the
determinant of profitability of agriculture. The regional produce, several intermediaries are paid a certain
distribution of agricultural credit in India is highly proportion of the price, as commissions. Thus the market
skewed. For example, the share of North Eastern States price which the farmer receives for his produce is
has been less than one per cent in total agricultural significantly lower than the price at which his produce
credit disbursement. Moreover, the informal source of
is sold to the retailer.
credit constitutes 40% of loans. The interest demanded
by them is very high and they eventually end up in losing Initiatives for Doubling Farmers Income
their land.
Y Improving Productivity: Due to stagnancy in quantum
Y Lack of knowledge among Farmers regarding use of
of agricultural land, it is imperative to increase
fertilizers: An imbalanced use of fertilizers lead to a loss
productivity over the same amount of land.
of fertility in the soil over a period of time, affecting
Y Pradhan Mantri Krishi Sinchai Yojana (PMKSY)
provides for more crop, per drop.
Y Soil Heath Card scheme aims at promoting soil test
based and balanced use of fertilizers to enable farmers
to realise higher yields at lower cost.
Y Improving Total Factor Productivity: TFP is an
important source of output growth which directly
contributes into the cost saving and thus increase the
income. TFP growth represents the effect of
technological change, skill, infrastructure etc.
Y National Agriculture Market (e-NAM) aims to form a
unified national market for agricultural products by
making a network for the markets related to the

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