Lok Sabha Question No. 502 (STARRED), answered on 2018-04-03
Subject: Import Liberalization
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: (ADV.) JOICE GEORGE

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE, COOPERATION & FARMERS WELFARE

## LOK  SABHA

## STARRED QUESTION NO. 502

TO BE ANSWERED ON THE 3 RD  APRIL, 2018

## IMPORT LIBERALIZATION

- *502.     ADV. JOICE GEORGE:

Will  the  Minister  of  AGRICULTURE  AND  FARMERS  WELFARE कृ ष एवं कसान कयाण ½ãâ¨ããè be pleased to state: (a) whether unbearable burden of debt and increased competition from imports are symptomatic of a crisis in Indian agriculture; (b) if so, the details thereof; (c) whether inability to bear debt has led to farmers' suicides on an unprecedented scale and if so, the details thereof; whether import liberalization has had a strong dampening effect on the prices of

- (d) several crops, especially plantation crops; and
- (e) if so, the details thereof?

## ANSWER

MINISTER OF AGRICULTURE AND FARMERS WELFARE

कृ ष एवं कसान कयाण ½ãâ¨ããè (SHRI RADHA MOHAN SINGH) (a) to (e): A statement is laid on the Table of the House.

## STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (e)  OF  LOK  SABHA STARRED QUESTION NO. 502  DUE FOR REPLY ON 3 RD  APRIL, 2018.

(a) to (e): The National Sample Survey Office (NSSO) conducted Situation Assessment Survey (SAS) of Agricultural Households during NSS 70 th round (January, 2013-  December  2013)  in  the  rural  areas  of  the  country  for  reference  period  of  the agricultural year July 2012- June 2013 which reveals the following:-

About 52 percent of the agricultural households in the country were estimated to be indebted. At all India level,  about  60  percent  of  the  outstanding  loans  were  taken from  institutional  sources  which  included  Government  (2.1  percent),  Co-operative society (14.8 percent) and Banks (42.9 percent). Among the non institutional sources, agricultural/  professional  money  lenders  (25.8  percent),  shopkeepers/traders  (2.9 percent), employer/landlord (0.8 percent), relatives & friends (9.1 percent) and others (1.6 percent) accounted for outstanding loans. The average amount of outstanding loan per agricultural household was Rs.47000/- (approx.).

Government has taken several measures to increase institutional credit flow and bringing more and more farmers including small and marginal farmers within the fold of institutional  credit.    These  measures  inter  alia,  include  the  following  major  steps  to provide hassle free crop loan to farmers including small and marginal farmers:-

## Interest Subvention Scheme:

Under the Interest  Subvention Scheme,  the  Government is  providing short-term  crop loans upto Rs.3 lakh for a period of one year to farmers at a subvented interest rate of 4% per annum     in   case   of prompt   repayment of the loan against the normal lending rate of 9%.  Thus on prompt repayment the farmers get Interest Subvention of 5% per annum.

Further, in order to discourage distress sale of crops by farmers, the benefit of interest  subvention  has  been  made  available  to  small  and  marginal  farmers  having Kisan Credit Card for a further period of up to six months (post- harvest) at the same rate as available to crop loan against negotiable warehouse receipts to store their post harvest  produce  in  warehouses  accredited  by  Warehousing  Development  Regulatory Authority (WDRA).

## Specific target for Small and Marginal Farmers

As per RBI directions, Domestic Scheduled Commercial Banks are required to lend 18% of the Adjusted Net Bank Credit (ANBC) or Credit Equivalent to Off-Balance Sheet Exposure (CEOBE), whichever is higher, towards agriculture. A sub-target of 8% is  also  prescribed  for  lending  to  small  and  marginal  farmers  including  landless agricultural labourers, tenant farmers, oral lessees and share croppers. Similarly, in the case of Regional Rural Banks 18% of their total outstanding advance is required to be towards  agriculture  and  a  sub-target  of  8%  has  been  set  for  lending  to  small  and marginal farmers.

## Kisan Credit Card (KCC) Scheme

Kisan  Credit  Card  Scheme is  aimed  at    providing  adequate  and  timely  credit support from the banking system under a single window to farmers for their cultivation and other needs. In terms of master circular dated July 03, 2017 of Reserve Bank of India, tenant farmers, oral lessees or share croppers are also covered under the KCC Scheme.  Under  the  Scheme,  a  flexible  limit  of  Rs.  10,000  to  Rs.  50,000  has  been provided  to  marginal  farmers  (as  Flexi  KCC)  based  on  the  land  holding  and  crops grown including  post  harvest  warehouse storage related  credit needs and other  farm expenses, consumption needs, etc., plus small term loan investments without relating it to the value of land.

In terms of the extant guidelines to banks, margin/ collateral for agricultural loans up to Rs.1 lakh is not required.

## Guidelines for Financing of Joint Liability Groups (JLGs) of 'Bhoomi Heen Kisan'

In  terms  of  Union  Budget  2014-15    it  had    been  declared  that  5    lakh  Joint Liability Groups (JLG) of 'Bhoomi Heen Kisan' will be financed through NABARD. RBI has  issued  guidelines  to  all  scheduled  commercial  banks  in  this  regard  vide  circular FIDD.  CO.FSD.BC.42/05.02.02/2014-15  dated  November  13,  2014.  One  of  the  main objectives of  financing through JLGs is to  augment flow of credit to landless farmers cultivating land as tenant farmers, oral lessees or share croppers and small / marginal farmers as well as other poor individuals taking up farm activities, off-farm activities and non-farm  activities.  As  on  31 st March,  2017,  cumulatively  24.53  lakh  Joint  Liability Groups  (JLGs)  have  been  provided  Rs.26,848.13  crore  loan  by  banks  across  the country.

## Agriculture Ground Level Credit flow for Small and Marginal Farmers

The  share  of  Small  and  Marginal  Farmers  (SMFs)  accounts  in  total  number financed by all agencies grew from 60.07 per cent in 2015-16 to 72.06 per cent in 201617.    More  importantly,  in  terms  of  amount  disbursed,  the  share  of  SMFs  grew  from 41.51  per  cent  (in  2015-16)  to  50.14  per  cent  (in  2016-17).  In  actual  terms,  the  agri credit  disbursement  towards  SMFs  grew  from  Rs.  3.80  lakh  crore  in  2015-16  to  Rs. 5.34 lakh crore in 2016-17, while the number of SMF accounts grew from 5.40 crore to 7.71 crore during this period.

The National Crime Records Bureau (NCRB) under the Ministry of Home Affairs compiles and disseminates information on suicides, in its publication titled 'Accidental Deaths    and Suicides     in India' (ADSI). These Reports on suicides are available upto

Contd..4/-

2015 on its website. The Reports for the year 2016 onwards have not been published yet. As per the ADSI Reports for the years 2014, 2015 and provisional data as provided by  NCRB for the year 2016, the total number of suicides by farmers and agricultural labourers in the country are 12360, 12602 and 11370 respectively. As per the Reports for  the  year  2015  the  total  number  of  suicides  committed  by  farmers  and agricultural labourers due to 'bankruptcy or indebtedness' in the country is as under:

|      |   Total number Farmers suicide |   Bankruptcy indebtedness |   % share of suicides |
|------|--------------------------------|---------------------------|-----------------------|
| 2015 |                           8007 |                      3097 |                  38.7 |

|      |   Total number of Agricultural labourers suicide |   Bankruptcy or indebtedness |   % share suicides |
|------|--------------------------------------------------|------------------------------|--------------------|
| 2015 |                                             4595 |                          255 |                5.5 |

The  domestic  prices  of  crops  are  influenced  by  several  factors  including domestic  demand  and  supply  situation,  role  of  weather,  global  availability  and  price trends  etc.  India  has  one  of  the  highest  average  agriculture  import  tariff  at  33.5% compared to other countries in the world, to protect the farmers/ cultivations/ domestic industry  against  any  cheap  and  abnormal  import.  Government  takes  appropriate measures  as  and  when  it  seems  necessary  to  check  abnormal  and  cheap  import  to protect  domestic  industry.  It  is  mentioned  that  India  has  trade  surplus  in  agriculture trade  over  the  last  many  years.  India's  total  agricultural  allied  sector  exports  and imports for the last three years are as follows :

(value in crore)

| Year    |   Export |   Import |
|---------|----------|----------|
| 2014-15 |   239471 |   121238 |
| 2015-16 |   215396 |   140311 |
| 2017-18 |   227554 |   164681 |

Contd..5/-

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India being a signatory to the WTO, it is duty bound to open up its markets to different products including agricultural products. However, necessary safeguards in the shape of flexibility  of  imposing  duties  as  well  as  taking  measures  to  apply  safeguard duty in case of injury to domestic industry or anti-dumping or countervailing duty etc. is available in case the situation so arises and the condition for imposing these measures are fulfilled. Wherever the Government feels that imports can influence a downward trend in prices of plantation crops, short term measure in the shape of minimum import price or duty increase has been tried. Recently, minimum import price in case of areca nut and black pepper have been notified to protect the interests of the farmers.

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