Why are farmers facing crippling debt? A. Increased expenditure on luxury items. B. Subsidies are not provided by the Indian government C. Prices of crops like cotton have risen dramatically. ?->(Show Answer!)

1. Why are farmers facing crippling debt? A. Increased expenditure on luxury items. B. Subsidies are not provided by the Indian government C. Prices of crops like cotton have risen dramatically.

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MCQ-> Read the following passage carefully and answer the question given below it. Certain words have been printed in bold to help you locate them while answering some of the questions.Agriculture has always been celebrated as the primary sector in India. Thanks to the Green Revolution, India is now self-sufficient in food production. Indian agriculture has been making technological advancement as well. Does that mean everything is looking bright for Indian agriculture ? A superficial analysis of the above points would tempt one to say yes, but the truth is far from it. The reality is that Indian farmers have to face extreme poverty and financial crisis, which is driving them to suicides. What are the grave adversities that drive the farmers to commit suicide, at a time when Indian economy is supposed to be gearing up to take on the world ?Indian agriculture is predominantly dependent on nature. Irrigation facilities that are currently available, do not cover the entire cultivable land. If the farmers are at the mercy of monsoons for timely water for their crops, they are at the mercy of the government for alternative irrigation facilities. Any failure of nature, directly affects the fortunes of the farmers. Secondly, Indian agriculture is largely an unorganized sector, there is no systematic planning in cultivation, farmers work on lands of uneconomical sizes, institutional finances are not available and minimum purchase prices of the government do not in reality reach the poorest farmer. Added to this, the cost of agricultural inputs have been steadily rising over the years, farmers’ margins of profits have been narrowing because the price rise in inputs is not complemented by an increase in the purchase price of the agricultural produce. Even today, in several parts of the country, agriculture is a seasonal occupation. In many districts, farmers get only one crop per year and for the remaining part of the year, they find it difficult to make both ends meet.The farmers normally resort to borrowing from money lenders, in the absence of institutionalized finance. Where institutional finance is available, the ordinary farmer does not have a chance of availing it because of the “procedures” involved in disbursing the finance. This calls for removing the elaborate formalities for obtaining the loans. The institutional finance, where available is mostly availed by the medium or large land owners, the small farmers do not even have the awareness of the existence of such facilities. The money lender is the only source of finance to the farmers. Should the crops fail, the farmers fall into a debt trap and crop failures piled up over the years give them no other option than ending their lives.Another disturbing trend has been observed where farmers commit suicide or deliberately kill a family member in order to avail relief and benefits announced by the government to support the families of those who have committed suicide so that their families could at least benefit from the Government’s relief programmes. What then needs to be done to prevent this sad state of affairs ? There cannot be one single solution to end the woes of farmers.Temporary measures through monetary relief would not be the solution. The governmental efforts should be targeted at improving the entire structure of the small wherein the relief is not given on a drought to drought basis, rather they are taught to overcome their difficulties through their own skills and capabilities. Social responsibility also goes a long way to help the farmers. General public, NGOs, Corporate and other organizations too can play a part in helping farmers by adopting drought affected villages and families and helping them to rehabilitate.The nation has to realize that farmers’ suicides are not minor issues happening in remote parts of a few states, it is a reflection of the true state of the basis of our economy.What does the author mean by “procedures” when he says that ‘farmers do not get a chance of availing institutional finance because of procedures involved in it’ ?
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MCQ-> The income disparity in the new India is massive: 36 billionaires in India and 800 million people living on less than $2 a day. The challenge for achieving inclusive growth relates to the revival of agriculture. Farming is becoming a non-viable activity. A confluence of factors, from poor rainfall to the new availability of consumer goods which consume much of Indian familie's incomes, has driven many farmers into crushing debt. The agriculture sector has many problems with a growth rate of less than 2% in the last decade. Further scope for increase in net sown area is limited. Disparity in productivity across regions and crops has persisted. Far from benefiting from the economic boom, many complain that banks don't offer the rural poor credit, forcing them to turn to greedy money-lenders, who typically charge up to 20% interest on a four-month loan. Healthcare and education costs have risen dramatically, while the global price of cotton has become depressed, largely due to the billions of dollars in subsidies Washington hands out to U.S. farmers. The approach to the revival of Indian agriculture seems to be incremental, rather than a holistic strategy. It is important to stress that growth and equity should be pursued simultaneously rather than following the 'growth first and equity next' approach. What are the challenges for achieving 4% growth and equity in agriculture? Policy makers like the National Commission on Farmers mention cost reduction in agriculture as important to compete in a globalised world. The most important problem for the farmers is output price fluctuations. There is a big gap between producer prices and consumer prices. In order to protect farmers from National and international price volatility, a price stabilization fund is needed. The supply and demand side constraints have to be removed to raise growth. The support systems have to be tuned to improve productivity and incomes of farmers with emphasis on small and marginal farmers and dry land areas. One of the differences between the green revolution in the 1960s / 70s and the present 'second green revolution' is that risk is higher in the latter approach as it has to concentrate more on dry-land areas. Trade liberalisation has also raised the risk and uncertainty. Thus, policymakers have to keep in mind the increasing risk in agriculture. Agriculture policies have to be gender sensitive too since the share of women is increasing. The Government is aware that the crop sector may not be able to grow at 4% per annum but horticulture and allied activities like dairying, poultry and fisheries have to grow at the rate 6 % to 7 % to achieve 4% growth in agriculture. Investment in irrigation and rural infrastructure is important for agricultural growth. It is known that public investment in agriculture is lower than the requirements needed for achieving 4% growth. Bharat Nirman Programme is in the right direction but the progress has to be much fasterWhat does the author view as a challenge for achieving inclusive growth?
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MCQ->Why are farmers facing crippling debt? A. Increased expenditure on luxury items. B. Subsidies are not provided by the Indian government C. Prices of crops like cotton have risen dramatically.....

MCQ-> Governments looking for easy popularity have frequently been tempted into announcing giveaways of all sorts; free electricity, virtually free water, subsidized food, cloth at half price, and so on. The subsidy culture has gone to extremes. The richest farmers in the country get subsidized fertilizers. University education, typically accessed by the wealthier sections, is charged at a fraction of cost. Postal services are subsidized, and so are railway services. Bus fares cannot be raised to economical levels because there will be violent protest, so bus travel is subsidized too. In the past, price control on a variety of items, from steel to cement, meant that industrial consumer of these items got them at less than actual cost, while the losses of the public sector companies that produced them were borne by the taxpayer! A study done a few years ago, came to the conclusion that subsidies in the Indian economy total as much as 14.5 per cent of gross domestic product. At today's level, that would work out to about 1,50,000 crore. And who pay the bill? The theoryand the Political fiction on the basis of I which it is sold to unsuspecting votersis that subsidies go the poor. and are paid for by the rich. The fact is that most subsidies go the 'rich' (defined in the Indian context as those who are above the poverty line), and much of the tab goes indirectly to the poor. Because the hefty subsidy bill results in fiscal deficits, which in turn push up rates of inflationwhich, as everyone knows, hits the poor the hardest of all. That is why taxmen call inflation the most regressive form of taxation. The entire subsidy system is built on the thesis that people cannot help themselves, therefore governments must do so. That people cannot afford to pay for variety of goods and services, and therefore the government must step in. This thesis has been applied not just in the poor countries but in the rich ones as well; hence the birth of the welfare state in the west, and an almost Utopian social security system; free medical care, food aid, old age security, et.al. But with the passage of time, most of the wealthy nations have discovered that their economies cannot sustain this social safety net, which in fact reduces the desire among people to pay their own way, and takes away some of the incentive to work, in short, the bill was unaffordable, and their societies were simply not willing to pay. To the regret of many, but because of the laws of economies are harsh, most Western societies have been busy pruning the welfare bill. In India, the lessons of this experience over several decades, and in many countriesdo not seem to have been learnt. Or they are simply ignored in the pursuit of immediate votes. People who are promised cheap food or clothing do not in most cases look beyond the gift horsesto the question of who picks up the tab. The uproar over higher petrol, diesel and cooking gas prices ignored this basic question; if the user of cooking gas does not want to pay for its cost, who should pay? Diesel in the country is subsidised, and if the user of cooking gas does not want to pay for its full cost, who does he or she think should pay the balance of the cost? It is a simple question, nevertheless if remains unasked. The Deva Gowda government has shown some courage in biting the bullet when it comes to the price of petroleum products. But it has been bitten by much bigger subsidy bug. It wants to offer food at half its cost to everyone below the poverty line, supposedly estimated at some 380 million people. What will be the cost? And of course, who will pick up the tab? The Andhra Pradesh Government has been bankrupted by selling rice as 2 per kg. Should the Central Government be bankrupted too, before facing up to the question of what is affordable and what is not? Already, India is perennially short of power because the subsidy on electricity has bankrupted most electricity boards, and made private investment wary unless it gets all manner of state guarantees. Delhi's subsidised bus fares have bankrupted the Delhi Transport Corporation, whose buses have slowly disappeared from the capital's streets. It is easy to be soft and sentimental, by looking at programmes that will be popular. After all, who does not like a free lunch? But the evidence is surely mounting that the lunch isn't free at all. Somebody is paying the bill. And if you want to know who, take at the country's poor economic performance over the years. Which of the following should not be subsidised over the years ?
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MCQ-> Governments looking for easy popularity have frequently been tempted into announcing give-aways of all sorts; free electricity, virtually free water, subsidised food, cloth at half price, and so on. The subsidy culture has gone to extremes. The richest farmers in the country get subsidised fertiliser. University education, typically accessed by the wealtier sections, is charged at a fraction of cost. Postal services are subsidised, and so are railway services. Bus fares cannot be raised to economical levels because there will be violent protests, so bus travel is subsidised too. In the past, price control on a variety of items, from steel to cement, meant that industrial consumers of these items got them at less than actual cost, while the losses of the public sector companies that produced them were borne by the taxpayer! A study, done a few years ago, came to the conclusion that subsidies in the Indian economy total as much as 14.5 per cent of gross domestic product. At today's level, that would work out to about Rs. 1,50,000 crore.And who pays the bill? The theory — and the political fiction on the basis of which it is sold to unsuspecting voters — is that subsidies go to the poor, and are paid for by the rich. The fact is that most subsidies go to the ‘rich’ (defined in the Indian context as those who are above the poverty line, and much of the tab goes indirectly to the poor. Because the hefty subsidy bill results in fiscal deficits, which in turn push up rates of inflation — which, as everyone knows, hits the poor the hardest of all. Indeed, that is why taxmen call inflation the most regressive form of taxation.The entire subsidy system is built on the thesis that people cannot help themselves, therefore governments must do so. That people cannot afford to pay for a variety of goods and services, and therefore the government must step in. This thesis has been applied not just in the poor countries but in the rich ones as well; hence the birth of the welfare state in the West, and an almost Utopian social security system; free medical care, food aid, old age security, et al. But with the passage of time, most of the wealthy nations have discovered that their economies cannot sustain this social safety net, which infact reduces the desire among people to pay their own way, and takes away some of the incentive to work. In short, the bill was unaffordable, and their societies were simply not willing to pay. To the regret of many, but because of the laws of economics are harsh, most Western societies have been busy pruning the welfare bill.In India, the lessons of this experience — over several decades, and in many countries — do not seem to have been learnt. Or, they are simply ignored in the pursuit of immediate votes. People who are promised cheap food or clothing do not in most cases look beyond the gift horses — to the question of who picks up the tab The uproar over higher petrol, diesel and cooking gas prices ignored this basic question: if the user of cooking gas does not want to pay for its cost, who should pay? Diesel in the country is subsidised, and if the trucker or owner of a diesel generator does not want to pay for its full cost, who does he or she think should pay the balance of the cost? It is a simple question, nevertheless it remains unasked.The Deve Gowda government has shown some courage in biting the bullet when it comes to the price of petroleum products. But it has been bitten by a much bigger subsidy bug. It wants to offer food at half its cost to everyone below the poverty line, supposedly estimated at some 380 million people. What will be the cost? And, of course, who will pick up the tab? The Andhra Pradesh Government has been bankrupted by selling rice at Rs. 2 per kg. Should the Central Government be bankrupted too, before facing up to the question of what is affordable and what is not? Already, India is perenially short of power because the subsidy on electricity has bankrupted most electricity boards, and made private investment wary unless it gets all manner of state guarantees.Delhi’s subsidised bus fares have bankrupted the Delhi Transport Corporation., whose buses have slowly disappeared from the capital's streets. It is easy to be soft and sentimental, by looking at programmes that will be popular. After all, who doesn't like a free lunch? But the evidence is surely mounting that the lunch isn't free at all. Somebody is paying the bill. And if you want to know who, take a look at the country's poor economic performance over the years.Which of the following should not be subsidised now, according to the passage?
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