Amidst Indias Boom, Its Small Farmers Suffer
Indias push to lend more money to farmers has coincided with a rise in agricultural output, supporting claims the funds are helping improve the quality of fertilizers and seeds while cushioning farmers from the impact of higher costs.
But farmer suicides, long seen as emblematic (symptomatisk) of the malaise in Indian agriculture, also continue, illustrating a key drawback: Money is NOT reaching the small farmer most in need of it.
Although credit is just one of several factors that determine the health of the farms, it has grabbed attention in India because small farmers with less than a hectare of land account for nearly 80 per cent of the countrys hundreds of millions of farmers.
The World Bank estimates that about 87 per cent of marginal farmers, who own less than two hectares of land, and 70 per cent of small farmers have no access to credit from a formal financial institution in India.
Some experts say that if credit distribution improves, the Indian government may find it easier to meet its foodgrain output target, crucial as food prices stay high. India this month banned exports of some grades of rice for the first time in several decades, amid worries of a possible shortage of the grain.
New Delhi is already grappling with a shortage of wheat that has jacked up its import bill.
The booming Indian economy is reliant on industry and services for growth, but farms, which account for just a fifth of gross domestic product, employ nearly two-thirds of the billion-plus population.
Kilde: www.worldbank.org
