Exmine the various causes of agrarian crisis in India. (2018, 20 Marks)
India’s agrarian crisis is a crisis of viability, not of output. Foodgrain production reached a record 376.56 million tonnes in 2025-26, yet most farm households cannot live on farming alone. The signs have been clear since the late 1990s: stagnant real incomes, rising debt, distress migration and farm suicides. The causes are layered: a structural base, economic triggers, and a policy framework that has blunted both.
Structural causes
- Pulverised holdings: about 86% of holdings are small or marginal, and the average holding is 1.08 ha (Agriculture Census 2015-16). Holdings shrink every generation through inheritance, below the scale that can repay investment.
- Too many people on the land: agriculture holds 43% of workers (PLFS 2025) but produces under a fifth of value added. Manufacturing never absorbed the surplus labour.
- Failed land and tenancy reform: tenants cultivate without records, so credit, insurance and procurement pass them by.
Price and market causes
- A thin MSP: the support price is administrative, not statutory. The Shanta Kumar Committee (2015) found that only about 6% of farm households sold to procurement agencies, mostly paddy and wheat growers in a few states.
- Cost-price squeeze and terms of trade: seed, fertiliser, diesel, power and wages have often risen faster than farm-gate prices. Output can grow while net income stalls.
- Volatility: gluts in onion, tomato and potato, sudden export bans, weak storage and cold chains, and mandis dominated by commission agents.
Credit and debt
- The Situation Assessment Survey 2019 (NSS 77th round) found agricultural households earning ₹10,218 a month. Wages (₹4,063) exceeded income from crops (₹3,798). 50.2% were indebted, with an average loan of ₹74,121.
- Moneylenders and input dealers still lend to the unrecorded and for emergencies. Loan waivers reach only formal borrowers.
Input, water and climate causes
- Declining returns: soils are exhausted, fertiliser response has fallen, and public extension has collapsed, leaving input dealers as the main advisers.
- About half of net sown area is rain-fed. Groundwater is over-drawn in the north-west and in hard-rock peninsular aquifers. Heat stress, unseasonal rain and erratic monsoons now make the risk worse.
- Crop insurance (PMFBY) suffers from delayed claims and leaves out tenants.
Policy and institutional causes
- Falling public investment since the 1980s was replaced by input subsidies, which Pranab Bardhan reads as buying off the rich-farmer class instead of building productive capacity.
- Liberalisation brought exposure without protection. Utsa Patnaik‘s “republic of hunger” thesis links post-1991 deflationary policy to falling rural purchasing power.
- Policy instability: the three farm laws of 2020, repealed in 2021 after the Samyukt Kisan Morcha’s year-long protest; the legal MSP guarantee still unresolved; and trade anxiety around the India–US interim framework of February 2026, even though staples and dairy were kept outside it.
The human cost and its reading
- NCRB’s ADSI 2024 recorded 10,546 farm-sector suicides (4,633 cultivators, 5,913 agricultural labourers), concentrated in the rain-fed cash-crop belts of Maharashtra and Karnataka. Labourers now outnumber cultivators among these deaths.
- A. R. Vasavi, in Shadow Space: Suicides and the Predicament of Rural India (2012), argues that debt alone does not explain the deaths. She points to the individualisation of cultivation: commercial, high-risk farming undertaken by households left without collective or state support.
Conclusion
The proximate causes of the crisis are prices, debt and climate risk. Its root cause is structural: a stalled transition that keeps over two-fifths of the workforce on shrinking plots. Price guarantees and waivers ease the symptoms. Recorded tenancy, public investment in water and research, crop-neutral price support and non-farm jobs are what would end the crisis.