Farmer Distress Index

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Farmer Distress Index UPSC: Relevance

Recently, National Bank for Agriculture and Rural Development (Nabard) has informed that it is planning to formulate a farmer distress index (FDI) to track, identify and support the real needy and distressed farmers.

किसान संकट सूचकांक

According to NABARD, Farmer Distress Index will be a dynamic index that be formulated to track, identify and support the real needy and distressed farmers.
This index won’t be uniform across the country as it changes from place to pace depending on the stress levels.
Depending on the kind and severity of distress, the support can be given as a combination of unconditional grants, loan restructuring and/or a complete debt waiver.
The index will also have a metrics on the existing level of debt burden of the farmers, their access to crop insurance.

In the recently published report on farm loan waivers in India, NABARD said that the design of loan waivers is such that a large section of the people whose loan should have been waived were unable to benefit from the process.
As a result, the needy and distressed farmers who are, in most of the cases, the small and marginal farmers are unable to get the help from the loan waivers.
The usual practice of measuring the distress of a farmer by the extent of his crop damage leaves way too many distressed farmers in other areas out of the beneficiary ambit.

The Index would help in recognising the needy beneficiaries of the distress package. Depending on the level of distress, the government and the financial institutions can decide on an appropriate package of support
- It is contrasting to the current practice of doling out distress package to all the farmers across the board.
It will also help the entire financial sector, government departments and insurance companies.
Farmer distress index can integrate the available high-frequency data on key agricultural variables like deviation of monsoon rains, variations in temperature and soil moisture, yield of major crops in the district, marketing opportunities available to the farmer, among others.
This index can be used by the policy makers and the government to plan and design a timely and targeted method of supporting distressed farmers.

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