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Rising input cost, lower prices leaves most farmers in debt-traps


Devdiscourse News Desk mumbai India
Updated: 19-12-2018 22:49 IST
Rising input cost, lower prices leaves most farmers in debt-traps

It said lower water availability--which can be measured either through lower rainfall as also a reservoir level-- has pulled down rabi acreage. (Image Credit: Flicker)

Amid reports of rising rural distress, a report has expressed concerns on an over 5 per cent dip in sowing for winter crops, which account for the bulk 40 per cent of the nation's annual agricultural output. Unless the sowing improves from now on, there will be an adverse impact on various aspects, including rural consumption, Crisil warned in a report Wednesday.

As of December 14, by when 81 per cent of the sowing gets completed, Crisil said there was a 5.25 per cent drop in sowing to 476 lakh hectares as against 502.5 lakh hectares in the year-ago period. It can be noted that tens of hundreds of farmers across the country have committed suicide in the past few years, either due to crop failures or very low prices, leading them to default on bank payments. The rising input cost and lower prices have left most farmers in debt-traps.

That the farmers are not happy with their governments was clear from three incumbent BJP chief ministers losing in the just-concluded Assembly elections. "This is a concern," it said, adding all the major crops have shown a decline in sowing, while crops that account for only 5-7 per cent of the total output and the rabi crops mainstay wheat has been flat.

Led by Maharashtra, pulses sowing has fallen a steep 9.3 per cent, it said, adding more worrisome is the massive 28 per cent plunge in acreage. Paddy contributes 15 per cent of the rabi production. It said lower water availability--which can be measured either through lower rainfall as also a reservoir level-- has pulled down rabi acreage.

Illustrating the importance of the farm sector, it said as much as 67 per cent of the population resides in villages, which contribute nearly 47 per cent of GDP. Normal monsoons in the past two years had fired up the rural economy, which had resulted in higher sales of automobiles and commercial sector, it said, adding leading FMCG brands had also indicated their rural sales are growing 25 per cent faster than in cities.

"With the rabi season showing clear signs of weakness, the rural contribution to growth has come under a cloud. Unless the sowing situation improves in the next few weeks, there can be a trickle-down effect on the sectors being driven by rural demand," it warned.

(With inputs from agencies.)

COUNTRY : India

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