Question

Q. Which of the following are long term solutions to farmers’ distress in India?

Select the correct answer using the code given below:

• A.
  1 and 2 only
• B.
  3 and 4 only
• C.
  1, 2 and 3
• D.
  1, 2, 3 and 4

Answer 1

The correct option is B

3 and 4 only
Explanation:

Option 1 is incorrect:
Though it helps in incentivizing production over the short term, it distorts the market mechanism as a result of which proper agricultural demand and supply curve remains disturbed.

Option 2 is incorrect:
It is a short term measure

Option 3 is correct:
A unified agricultural market would mean doing away with intermediaries and better price discovery.

Option 4 is correct:
Land consolidation can provide the advantage of economy of scale.

Extra Information:
Agricultural markets have witnessed only limited reforms. They are characterised by inefficient physical operations, excessive crowding of intermediaries, and fragmented market chains. Due to this, farmers are deprived of a fair share of the price paid by final consumers. States have also not shown any urgency in reforming agricultural markets. For better income generation for farmers, agriculture has to go beyond farming and develop a value chain comprising farming, wholesaling, warehousing, logistics, processing and retailing. The creation of a competitive, stable and unified national market is needed for farmers to get better prices. We need to have policies for land consolidation along with land development activities to tackle the challenge of the low average size of holdings. Farmers can voluntarily come together and pool land to gain the benefits of size. Through consolidation, farmers can reap the economies of scale both in input procurement and output marketing.