RADHAKRISHNA COMMITTEE ON AGRICULTURAL INDEBTEDNESS

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Introduction
• The issue of farmers suicides is a burning one- one that has forced the central and state governments to offer relief packages for the affected. The Radhakrishna Committee was constituted to analyse the neglect of agricultural in the planning process and the agricultural crisis that has resulted thereof.
Findings of the Report
• There has been a significant slowdown in the growth of the agricultural sector in the past two decades, and this is particularly accentuated when one compares it to the other sectors of the economy. The share of agriculture in the national product has considerably reduced, but the number of workers depending on it for their livelihoods has hardly changed. The reasons for the current agrarian crisis are various, and they have all acted together in order to manifest the problem in extreme forms such as farmers’ suicides.
• The nature of the problem, as explained by the Radhakrishna Committee can be explained as follows:
a) An excessive proportion of the population is dependent on agriculture. In 2004-2005, from the estimated population of 1092 million in India, 71.4% were in rural areas. Of the total work force, some 56% worked in agriculture, and yet the share of agriculture in the GDP was around 20% (as against some 42% in 1972-73).
b) The rural economy continues to remain by and large undiversified (most of the workers in rural areas are engaged in agriculture).
c) Increasing stress on water resources: There is both the increasing stress on available water resources, as well as the unequal availability of water across the country. Groundwater has emerged as an important source of irrigation, although it has created problems of over exploitation
d) Wide regional disparity: There are wide disparities between different states as regards the productivity and growth in agriculture on account of environmental and governance related issues.
Recommendations
a) Cause of agricultural crisis:
• Root crisis of agricultural indebtedness is not just agriculture alone. Indebtedness is just a symptom.
• These underlying causes are stagnation in agriculture, increasing production & marketing risks and lack of alternative livelihood.
b) Positive repayment system:
• A positive repayment culture for bank loans should be encouraged.
• Under this, those who repay promptly should be rewarded.
c) Money Lenders debt repayment fund:
• Formalize the informal credit by providing long term loans to farmers by banks to enable their debt to the moneylenders.
• For this, create a moneylenders debt repayment fund with a corpus of Rs. 100 crore.
d) Reschedule loans of farmers affected by natural calamities.
e) Ensure that banks adhere to priority sector lending; ensure that Rural infrastructure development fund (RIDF) should be effectively deployed for agricultural development.
f) Crop insurance scheme faces following problems in implementation:
• Non-availability of reliable yield data below state/district level.
• Most of the claims go to few crops in few states.
g) Diversify livelihood base by promoting allied agro-processing and other rural non-farm activities.
h) Strengthen primary health care:
• Expenditure in health leads to heavy borrowing. Thus strengthen primary health care.