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Showing posts from March, 2013

Getting the Problem Right

In terms of theage-old problem of helping farmers increase their productivity and income, I don’t think agricultural credit and finance are the right problems to focus on. I make this statement cautiously--but based on the observations of an on-going CMF study in 4 states, farmers (small, medium, and large) are able to access crop-loans through banks or co-operatives with relative ease. The penetration and coverage of such formal credit sources is quite high based on district-level data. Loan appropriateness is also not necessarily the issue. Amounts for crop-loans are fixed by a technical committee through a ‘scale-of-finance’ framework, based on i) amount of land owned by the farmer and ii) the type of crop grown. Loans are also released on a timely basis
So why does the debate around helping farmers always focus on credit? Even with access to credit, the small farmer still suffers from an absolute income deficit where he cannot compensate for major expenses, risks undertaken, or reg…

Going to the Roots - Budget 2013's focus on Agriculture

While going through the recent Budget 2013 session described vividly across various media sections, it would be safe in saying that it has not raised any major controversy or questions to some extent, though experts are still going through the same and are giving out their expert opinion on the same. I am writing this post to highlight what are the facets of this Budget with respect to agriculture. 
Image Courtesy: Deepti Kc, Location: Chattisgarh
Like most countries in the developing world, experts and economists may be of the opinion of that an economy must transition from being an agriculture driven one to that of a manufacturing driven one. I believe India is a far way from saying that we have reached such a stage. We still have to pay undivided attention to the sector as 580 million Indians still depend on agriculture. Some of the key points of the recent Budget with respect to agriculture are as follows:- Allocation of Rs27,049 crore to the Ministry of Agriculture, an increase of…