Farmers First ? Rethinking Agarian Distress and Illusion of Policy Support

"When over 3,00,000 farmers in a country choose death over debt, it reflects not desperation alone,but the collapse of a system meant to protect them. Agriculture in India, nowdaye survives in the margins which is economically undervalued and often ignored and politically under-prioritized. Despite employing nearly 45% of India’s workforce, the sector contributes only 16–17% to the GDP, down from nearly 50% in 1950. This widening gap is not just a statistic- it is the outcome of a structural imbalance, where those who grow our food are unable to feed their own families.The distress is so deep that those still in farming want to leave—at any cost. And when all attempts fail, many lose hope. That’s how they become part of a heartbreaking toll: over 3 lakh farmer suicides in FY 2023–24.

Agrarian Distress: More Than Just a Farmer’s Struggle

Agrarian distress refers to the severe and persistent crisis faced by the agricultural sector-especially by small and marginal farmers-due to a combination of economic, institutional, and, most importantly, policy-related factors. Its impact is not confined to the economic field or domain; it crosses over, leaving devastating impact on the social and psychological paradime too A decline in farm incomes, rising indebtedness, frequent crop failures, and the alarming number of farmer suicides are just some of the visible indicators that reflect the intensity of distress in rural India.Before evaluating economic policies, we must understand that the roots of this crisis are also buried deep within India’s social structure (distribution of power). The majority of farmers over 85% own less than 2 hectares of land, whichh place them in the category of marginal or small farmers. Most of them also belong to historically oppressed communities or class, such as Dalits and Adivasis, whose suffering is magnified by unequal access to land and institutional support. Locked out of the power structures that dominate rural India, many are forced to work as landless laborers or tenant farmers, with little or no access to formal rights and benefits. What we often see in the public domain is just the economic side of this distress. But behind the falling numbers lies a more painful truth its psychological cost. When a crop fails whether in Vidarbha, Maharashtra, or elsewhere it doesn’t just ruin a harvest. It pushes entire communities into cycles of chronic stress, anxiety, depression, and hopelessness. The inability to repay loans often leads to public humiliation, loss of dignity, and a shattered sense of self-worth. It's uncovered dimensions of the agriculture distress who often remain far away from mainstream discussions.

Agrarian distress, then, is not just about bad harvests or falling prices. It’s about losing identity, confidence, and hope-dragging down an entire generation with it.

UNDERSTANDING THE CRISIS: FOUNDATIONAL CAUSES OF RURAL DISTRESS

The Debt Trap: A Vicious Cycle of Credit and Crisis

Indebtedness has become one of the main reasons behind the growing distress among farmers especially in small and marginal ones. Along with limited credit access and market restrictions, it creates a constant struggle for survival.Data from NABARD gives a worrying picture. In its 2016–17 All India Rural Financial Inclusion Survey, it was found that 52.5% of agricultural households were under debt. The report also revealed that the average debt per indebted agricultural household was ₹1,04,062 almost equal to their average annual income of about ₹1,07,000. That’s a difference of just ₹2,500, which shows how hard their financial condition is. Later, the 2022 report showed that around 52% of farmers were still in debt, showing little to no improvement. While all types of farmers face loans, the report highlighted that those owning more than 2 hectares of land were even more likely to be in debt. This challenges the common belief that owning more land means more financial security in reality, it often comes with higher liabilities and multiple loans.

Credit Sources and the Cycle of Indebtedness

From the outside, New India look digitally connected and financially organized. But on the ground in villages and rural areas the reality is different. Less than half only 46% of farm loans come from commercial banks, and only about 10% come from Self-Help Groups (SHGs). Shockingly, nearly 50% of loans still come from non-institutional sources like relatives, landlords, and moneylenders. These loans often carry very high interest rates, sometimes as high as 2% to 5% per day, which push farmers deeper into a debt trap.

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Kisan Credit Card (KCC) and Hidden Debt Traps:

The Kisan Credit Card (KCC) scheme, launched in 1998, was meant to provide short-term, low-interest loans for farming. While the official interest rate is around 4% per year, in reality, many farmers are not able to use it as intended. Due to lack of support during emergencies like weddings, medical bills, or children’s education farmers often end up using the KCC loan amount for personal needs, not farming. As a result, the money that was meant to improve agricultural productivity gets used for survival. This creates a cycle of developmental debt, where farmers fall behind instead of moving ahead.

The Minimum Support Price (MSP) Divide: Policy Intent vs. Ground Reality

The Minimum Support Price (MSP) was introduced as a safety net for farmers, but in practice, it largely benefits a limited section mainly medium and large land-owning farmers from the northwestern states. According to the NITI Aayog Report (2023), only 6–8% of farmers in India actually sell their crops at MSP. In many eastern and tribal regions, there aren’t even enough procurement centers.When a policy like MSP is applied unevenly, it can unintentionally deepen inequality rather than reduce it. Rice and wheat are the two most commonly procured crops under MSP. This has led to overproduction in some areas (mainly the west ) and has even pushed farmers in unsuitable regions to grow these crops just to be eligible for government support. Meanwhile, nutritious and climate-resilient crops like millets, pulses, and oilseeds are neglected because they either don’t have MSP coverage or their prices largely get often determined and driven by global market trends. India has been promoting Shree Anna (millets) on global platforms especially after the UN declared 2023 as the International Year of Millets;yet, there is still no strong MSP-backed procurement system introduced from central government in place for these crops. Farmers have long been demanding a wider and more inclusive MSP coverage. Those who benefit the most from MSP tend to have land, storage facilities, and political access. Marginal, tenant, and landless farmers especially from SC/ST/OBC groups and women are often left out due to lack of land titles, market access, and formal recognition which eliminates their power to negotiation The policy that was meant to reduce distress often ends up helping those who are relatively better off, while those most in need remain excluded. At the same time, India's current procurement and storage systems are already under pressure. Making MSP legally binding across all crops and regions will lead to excessive buffer stocks and storage challenges. There are also concerns that a legal MSP could go against the norms and rules of World Trade Organization (WTO) which can expose India to international scrutiny or penalties. While MSP plays an important role in providing income support however its limited coverage, regional imbalance, and lack of legal guarantee make it less effective as a nationwide solution to farmer Distress

Not All Farmers Are Equal: Caste Dimensions of India’s Agrarian Distress

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Social inequality and marginalization are deeply embedded in the root cause of agrarian distress in India, particularly for vulnerable groups. Social hierarchy and caste-based discrimination often marginalize small and marginal farmers especially those who belong to lower castes and depressed classes. This marginalization and discrimination often restrict them from accessing land, markets, and government schemes, which leads to their exclusion from the mainstream and further causes long-term economic and social vulnerability. On groundlevel, Commercial banks even government banks often hesitate to give loans to farmers who belong to Dalit and depressed classes. As per the NABARD report for FY 2022: Over 74% of SC/ST farmers do not have access to formal credit and depend on informal lenders with exploitative interest rates. The NCAR and IndiaSpend report shows that Dalits constitute over 20% of landless tenant farmers, yet less than 5% receive benefits from government land redistribution and welfare schemes. The crux is that land reforms have stagnated, and redistribution of surplus land is largely incomplete or captured by upper castes. When it comes to suicide, the NCRB data says: 33% of farmer suicides are from SC/ST communities. Somewhere, their identities limit their access to the social capital and networks that influence bank lending, mandi prices, and even MSP procurement. One of the main reasons behind the suffering of these lower sections is the lack of representation in decision-making authorities and institutions. They are underrepresented in farmer unions, panchayats (which hold real decision-making power), and bureaucratic mechanisms like agricultural offices and loan committees. This issue was clearly visible during the 2020–21 farmer protests, where dominant voices came from Punjab-Haryana’s Jat-Sikh community, while the issues of Dalit labourers and tenant farmers received little attention. Agricultural cooperative schemes that are meant to collectivize farmer power are often captured by upper castes. And due to an over-emphasis on digital portalsu (e.g., MSP registration, KCC loans), farmers with low digital literacy specially tribal and SC/ST farmers  are disproportionately excluded. While we focus on digital governance, the government should ensure that offline channels also function smoothly ie (fairness and efficiency work in offline goverment offices).

Women Farmers, Unseen and Underserved

The Economic Survey 2023 highlights that 85% of rural women are engaged in agriculture, yet only 13% hold land (NSSO 2021). In the patriarchal society of India, women’s names are often missing from land titles, which disqualifies them from government schemes like PM-Kisan, Fasal Bima Yojana, and other institutional benefits. In a recent cases reported from Maharashtra, several widows of farmers who died by suicide were denied compensation because the land was not registered in their names. This deepens the agrarian crisis; when the male farmer dies by suicide due to debt, it leaves women to fight a "lonely battle" to repay loans and raise children. Policy gaps make the crisis more severe. Schemes designed to reduce the gender gap, such as Mahila Sashaktikaran Pariyojana under NRLM, suffer from poor fund utilization and low awareness. Other schemes like e-NAM, input subsidies, and crop insurance lack gender-specific provisions. Unless policies explicitly address social and institutional barriers like caste, landlessness, and gender, India's agrarian reforms will remain incomplete and inequitable. A rights-based, inclusive approach targeting SC/STs, women, and smallholders is the only sustainable solution

EVALUATING STATE RESPONSES TO AGRARIAN DISTRESS

Shifting Policy Priorities in Indian Agriculture: A Historical Overview

Post-independence, India’s agricultural policies were mainly focused on two core goals. The first was food security/self-sufficiency, which aimed to overcome hunger and reduce dependency on food imports. The second was remunerative prices for farmers, to ensure food producers earned enough to survive. These goals were often in conflicting in nature. To keep food affordable for the masses, the government had to suppress food prices leading to what economists call a “consumer bias”: prioritizing cheap food over fair income for farmers. Later, in the 1960s, the Green Revolution marked a transformational period for India’s agrarian sector. It turned a food-deficit nation into a food-surplus one. However, this success brought long-term ecological and structural damage. Farmers focused mostly on wheat and rice, ignoring other crops. This created an imbalance between different regions and farmer groups in India. Overproduction of wheat and rice also led to groundwater depletion and soil degradation especially in the western parts of India. The very system built to ensure surplus food is now causing environmental and economic vulnerability.

The Evolution of Agri Policy Objectives: A Pre-2014 Perspective

Before 2014, APMCs (Agricultural Produce Market Committees) were state-regulated market yards (mandis) governed by the APMC Acts. These structures were much strict than that time as the comparison of now, largely due to earlier government policies. Farmers were not allowed to sell their produce outside APMC-regulated markets for notified crops. Private markets, direct contracts, or online sales were mostly illegal or severely restricted. Only licensed traders could buy produce often leading to monopoly or cartelization.After 2014, the focus shifted toward agricultural market reforms, with goals such as increasing competition, reducing dependence on middlemen, allowing private players, and giving farmers more freedom at least from government perspectives. This led to the introduction of the Model APMC Act (2017), which allowed private markets and eased licensing rules. Later, in 2020, one of the three now-repealed farm laws permitted trading outside APMC mandis which further bring more clarity that goverment shift towards its Neo-liberal policies for agriculture sectors. However, the other side of the coin is seen is evident in Bihar, which scrapped APMCs in 2006 and today the farmers of Bihar are in the most worse condition. Although APMC restrictions were removed, the absence of proper regulation and infrastructure didn’t lead to real competition instead of that private exploitation. And in 2014, some states like Uttar Pradesh, Madhya Pradesh, and Karnataka tried to create parallel market systems. But due to inconsistent rules and a lack of regulation, these attempts also failed to deliver meaningful benefits. India’s agriculture policy especially before 2014 was playing a vital role in achieving food security and stabilizing rural economies. However, it also laid the foundation for many structural weaknesses that now define the agrarian crisis. Policies that once prioritized yield over ecology, control over markets, and capital over equity have created an unsustainable system.

Post-2014: A Paradoxical Policy Approach

Post-2014 presents a paradoxical approach by policymakers towards agriculture. On one hand, the state continue to plays a developmentalist role:: expanding public spending, direct cash transfers, and targeted subsidies (e.g., PM-KISAN, PMBGY, Soil Health Cards, irrigation funds). On the other hand, there is a clear thrust toward market liberalization, visible in other government schemes such as e-NAM (digital markets), the attempt to dismantle the APMC structure, and deregulation of trade and procurement. This dualism creates a constant tension between neoliberal rationality and welfare developmentalism. Policies now position the state both as a facilitator of markets and a provider of welfare, leading to a fragmented and often contradictory policy environment. Even the agri welfare schemes come with their own problems and flaws. While their design appears efficient on paper, their implementation is weak and poorly integrated on the ground. There are dozens of flagship programs, but very little vertical coordination. For example: soil advice, credit, crop choice, and market access rarely line up around the same goals or crops.Most policies since 2014 -PM-KISAN, PMFBY, Soil Health Card, KCC, Operation Green—are input-based and techno-targeted, focusing on incremental productivity and risk mitigation. But they failed to address the fundamental issues such as: Land ownership inequality•Tenancy reform•Crop diversification•Ecological sustainability•Power asymmetries in supply chains.

These are largely "technicist" approaches relying on technology, capital infusion, and financial instruments—without structural reforms. The BJP era, in this sense, represents more of agrarian managerialism than any real agrarian transformation. Nodoubtdly, PM-KISAN (₹6,000 annual cash transfer) is a classic populist move, delivering direct income support and bypassing bureaucratic intermediaries. But even this scheme has become outdated and ineffective due to the lack of upgrades or context-sensitive revisions.(further discussed) We are seeing a shift toward "post-productivist populism", where political legitimacy is earned not by reforming institutions but by distributing benefits. This aligns with Partha Chatterjee’s idea of "political society", where the state engages citizens not as rights-bearing individuals, but as target groups to be managed through schemes and entitlements and often due to goverment behavior this PM Kishan appear the part of this classic approach.. This wave of modernization through government schemes still seems to reinforce Green Revolution-era patterns monocultures, chemical dependence, and groundwater overuse. There is a clear lack of agroecological thinking in current policy design. Millets and regenerative farming are promoted symbolically, but subsidies and procurement policies still favor the wheat–rice–fertilizer regime. Conceptually, India remains stuck in a productivist paradigm, still chasing yield over sustainability—a concern already flagged in the 2050 agricultural foresight reports.

RECENT INTERVENTIONS: BETWEEN POLITICAL PROMISE AND PRACTICAL GAPS

In the past decade, India has witnessed a flurry of government interventions aimed at transforming agriculture from income support and crop insurance to digital markets and farmer collectives. While these schemes mark a shift towards welfare and modernisation, their real-world effectiveness remains deeply contested.

PM-KISAN: A Direct Transfer with Limited Impact

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Introduced in 2019, PM Kisan promised ₹6,000 per year to all eligible farmers through DBT, aimed at augmenting incomes, reducing distress, and strengthening input affordability.Official records show that by 2024, over ₹3.68 lakh crore had been transferred to ~11 crore farmers. However, the amount – ₹6,000/year = ₹500 per month = roughly 15 days of input cost – is totally insufficient.A major problem it does not address is landless and tenant farmers. In India, the majority of farmers from SC/STs and depressed classes are landless or tenants. Additionally, 13% of rural households in India are landless cultivators, which make them remain excluded from this DBT. Alongside these policy gaps, the CAG Report (2022) flagged duplicate and ineligible entries in some states. Wrong DBT transfers happened from the government side. After 4-5 DBT transfers, the government issued notifications to all ineligible beneficiaries for money recovery. This created additional strain on millions of poor farmers who firstly received the money as DBT in election time as reported in many states and were later asked to return money they had already spent. PM Kisan is targeted populism and short-term relief, not structural reform. This scheme gives money but doesn't ensure access to quality inputs, land markets, or resilience. The amount transferred through this scheme is completely minimal in current times. PM Kisan also does not address price volatility, rising debt, or market exclusion, which limits its ability to empower the most vulnerable.

PMFBY (Pradhan Mantri Fasal Bomma Yojana):

Launched in 2016 to reduce climate and income risk by offering crop insurance at subsidized premiums. Premiums are capped at 2% for kharif and 1.5% for Rabi crops. According to government data, by 2024 it had covered 5.7 crore farmers. It also introduced remote sensing, GPS tech, and smartphone apps for quicker claim assessments. In some disaster years (e.g., 2019-20 floods), payouts were helpful to farmers However, data also flagged that farmer enrollment is continuously declining in this scheme due to its complexity and provisions which favour insurance companies. Many farmers had to wait 4-6 months or more for settlement. This argument gained more power from the decision of several states – such as Gujarat, Andhra Pradesh, and Bengal – to exit the scheme, citing private insurers' profits and lack of transparency. Overall, PMFBY is a privatized insurance model where private firms profit, risk is not redistributed equitably, and it failed to create resilient agrarian infrastructure. This is again reflects the government's technocratic modernism approach; fancy tools but low farmer agency.

E-NAM:

Launched in 2016 to create a unified national market for agri-produce by integrating APMC mandis digitally, aiming to improve price discovery, reduce middleman exploitation, and enable inter-state trade. In terms of achievement, it linked 587 APMC Mandis across 16 states, with over 1.6 crore tonnes of produce traded and 87 lakh farmers registered. But the offline trades still dominate the market; most final trades happen physically outside the NAM portal. Before integrating APMC mandis, the union should have integrated the varying APMC laws of various states, which would make e-NAM effective and make a true national market. There's also a lack of logistics; farmers can't sell across states due to lack of storage, transport, or payment security. Basically, E-NAM assumes that tech alone can solve structural inequities. But it fails to address the power asymmetries between larger traders and small farmers. Without reforms in physical infrastructure, regulations, and farmer agency, e-NAM remains a digital ceiling over a broken floor.

Soil Health Card: 

Launched in 2015 to scientifically manage fertilization, distributing cards showing nutrient levels of individual farm plots and providing customized recommendations. Government sources state over 13 crore cards were distributed between 2015-2019, significantly raising awareness of soil conditions A NITI Aayog study flagged that nationally, only <25% of farmers followed recommended dosages. The lower availability of testing labs often raises questions on the data's accuracy. There are also no incentives to change behaviour; for example, urea remains heavily subsidized, leading to overuse despite card advice. This scheme reflects top-down-ism: it relies on data delivery without behavioural change or farmer dialogue. Through this scheme, the government does not appear to make progress toward agroecological models. Soil health is framed only in chemical terms, ignoring microbial life, organic matter, and local practices. It seems an attempt to implement "Green Revolution 2.0" – i.e., more data, more inputs, but no transformation of farming systems.

India's post-2014 agri-interventions represent a model of "state-led managerialism" where schemes deliver piecemeal support but fail to transform the agrarian structure, market relations, or ecological base.

AGRARIAN REFORMS INTERRUPTED? : THE RISE AND FALL OF THE 2020 FARM LAWS

In September 2020, during the lockdown the Indian government introduced the three farm laws through ordinance aimed at fundamentally reforming agricultural marketing and trade. These laws, however, sparked widespread protests by farmer unions, ultimately leading to their repeal in November 2021: (electoral)

The Three Farm Laws and Their Stated Aims:

1. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020: 

This law aimed to enable farmers to sell their produce outside the Agricultural Produce Market Committee (APMC) mandis, remove inter-state trade barriers, and provide a framework for electronic trading . It also prohibited state governments from levying market fees or cess on trade conducted in 'outside trade areas,' seeking to break the monopoly of government-regulated mandis and allow direct sales to private buyers. The government argued this would increase farmers' choices, lead to better price realization, and create a "One India, One Agricultural Market".

2. Farmers (Empowerment and Protection) Agreement on Price Assurance and FarmServices Act, 2020: 

This act was aim to create a national framework for contract farming,allowing farmers to enter into written agreements with companies for produce supply. It aimed to transfer market unpredictability risks to sponsors, ensure better price discovery, and facilitate access to modern technology and inputs.

3. Essential Commodities (Amendment) Act, 2020: 

This law removed cereals, pulses,oilseeds, edible oils, onions, and potatoes from the list of essential commodities,deregulating their production, storage, movement, and distribution. It aimed to attract private investment in agricultural infrastructure by removing stockholding limits. Against these bills the Farmer Protest began in Haryana and Punjab later this movement grew into a mass movement peaking at Delhi Borders (2020-21) with the 500 farmers unions and under this movement various solidarity marches get organized across the countries and after the 13 months of the peaceful protests the bills get repeal in NOV 2021 which mark the ending for India's last peoples movement. 

FRAMERS CONCERNS:

If APMC regulations the system could collapse,it will affect the MSP linked procurement. Without the legal enforceability of the MSP , farmers fear being forced to sell at the exploitative rate. Once the public procurement weakens, the market may shift in favour of corporation..Regarding the contract farming, there are concerns that it could lead to corporates monopolies,price fixing and a loss of farmer autonomy especially for the small and marginal farmers. Resolution being handled in SDM courts and there's no scope for the Civil Court in this process which makes it more suspectable and it seen as a violation of the farmers right. In India, 86% of farmers are small or marginal. If the APMC Structure collapse then these farmer will loose their bargaining power and the ability to negotiate fair prices.

There were some serious concerns regrading that proposed laws:.

1. The Farmers’ Produce Trade and Commerce Act: Undermining APMC and Farmers’ Security

This law allowed trade of agricultural produce outside APMC mandis without taxes or state regulation, aim create the “barrier-free market.” However, this would have gradually led to the collapse of APMC mandis, which are still the only platform that ensure Minimum Support Price (MSP)-linked procurement for many farmers. With no legal guarantee of MSP outside these mandis, farmers — especially small and marginal ones — would forced to sell to private players at lower prices. This law would have benefitted large agri-corporates who could dictate prices without state oversight, leaving small and marginalized farmers vulnerable to market fluctuations. In effect, it would have removed the only safety net that currently exists for farmers 

2. The Farmers (Empowerment and Protection) Agreement on Price Assurance Act: Contract Farming Without Protection

This law promoted contract farming, claiming to offer price assurance and market linkage through agreements between farmers and agri-businesses who are owned by giant corporate houses. But in reality, the law offered no price guarantee, only the “terms of agreement” — making it easy for companies to shift risks onto farmers as they are doing ploughing so ultimately they are responsible for the productivity. Importantly, dispute resolution was placed under Sub-Divisional Magistrates, not civil courts, meaning farmers had no access to fair legal recourse. In a country where 86% of farmers are smallholders and most them from the depressed class, they lack the bargaining power, legal literacy, and capital to negotiate with corporations. And it's common sense the co-operate house has better and sufficient resources to influence the decisions and tilt them in its favour. This law risked turning them into subcontracted laborers on their own land, increasing their vulnerability to exploitation, monoculture pressures, and input dependency, all without any institutional support.

3. The Essential Commodities (Amendment) Act: Legalizing Hoarding and Price Manipulation

This law removed key agricultural items like cereals, pulses, and onions from the list of essential commodities, eliminating stock limits except in extreme emergencies. The government claimed this would encourage private investment in warehousing and supply chains. In reality, it would have allowed large traders and corporations to hoard produce, manipulate supply, and create artificial scarcity, leading to price spikes for consumers and price drops for farmers at harvest. Every year, we observe that when the price of some vegetables rise sharply due to shortages, the goverment issue ordered to prevent the hoarding. If such protective laws are removednor weakened, traders may exploit the situation by hoarding vegetable and crops whenever they want , and they can artificially create scarcity to drive up prices 

A Look at India’s APMC System: Enabler or Obstacle?

The APMC system was originally a state-led institutional protection for farmers in an otherwise exploitative, unregulated agrarian market. The intent behind APMC was to eliminate middleman exploitation and ensure price discovery through auction, offering a transparent and fair payments mechanism. Under the APMC, the government also built market infrastructure like storage, weighing, and auction facilities. Their main aim was to prevent distress sales to usurious moneylenders or traders. APMC represents the nature of a regulatory state approach to agriculture – the idea that small farmers need the shield of the state to bargain fairly in markets dominated by wealthier actors. However, APMC Mandis come with various flaws. The APMC Acts were passed at the state level with no central regulatory conditions. This led to each state having its own mandi rules, trader licensing criteria, taxes, and dispute mechanisms. This now causes hindrances in the effective implementation of central schemes like e-NAM. The absence of a uniform, interstate marketing policy fragmented India's agri-markets, reduced competition, and reinforced local monopolies within each mandi. Budget allocation and reforms for Mandis remain limited, ad hoc, and low on policymakers' priority lists. A few years ago, when the new farm laws were introduced, they were seen as an attempt to pull back government responsibility from the APMC. Most Mandis lack cold storage, grading labs, drying yards, or real-time price displays. Even when e-NAM was introduced, only the digital layer was added, not the physical infrastructure. Successive governments have focused on schemes over the system – building new programs while letting core public institutions like APMCs decay due to underfunding and neglect. No law or institutional mechanism existed to check the political capture of APMCs. Traders and commission agents became local power brokers. APMC boards were filled with political appointees, not farmer representatives. Over the decades, the APMC became a site of state capture. State protection policies allowed their transformation into rent-seeking political fiefdoms. Instead of improving APMCs through reforms (digitization, farmer FPOs, transparency laws), the government bypassed them using e-NAM (a digital market that still needs APMCs) or proposed parallel private networks (the 2020 Farm Laws) that would kill APMCs altogether. This approach reflects state withdrawal from regulatory responsibilities, trying to create "competition" by destroying the public option instead of reforming it.The APMC story is not of a bad idea, but of a good institution left to rot. The state slowly withdrew, letting trader and bureaucracy take over. Instead of fixing broken institutions, the state tried to introduce new platforms (e-NAM, private Mandis) that ignored structural constraints. Instead of reforming these structural weaknesses, recent farm laws tried to dismantle the system. This would leave farmers even more vulnerable to market failures.

WHAT NEEDS TO CHANGE: THE ROAD AHEAD FOR THE INDIAN AGRARIAN SECTOR

If India’s farmers are to thrive  not just survive the time has come for bold, bottom-up reforms. The future of agriculture must focus on justice, equity, innovation, and sustainability at every level of governance.

Fixing the Mandis: What APMC Reform Should Look Like

The major problem with APMCs is that in northern and western states, they’ve become strongholds of commission agents who operate as unregulated middlemen. These traders often suppress prices, reject produce arbitrarily, and delay payments and this trader lobby also holds significant political stake,, making it difficult for small and marginal farmers to assert their rights or get timely compensation. .To overcome this problem and to make this middlemen weak and central should bdemocratize market governance, 25% of APMC trader licenses and auction stalls should be reserved for Farmer Producer Organizations (FPOs) and cooperatives which commonly known as SHO. These FPOs would act as bulk buyers and brokers for their member farmers. This modelsuccessfully functional in the Kenya where in the Warehouse Receipt System, farmer cooperatives run local collection centers, bypassing exploitative intermediaries. Most mandis lack basic infrastructure like cold storage, grading labs, drying yards, and digital auction tools. As a result, farmers are forced to sell their goods immediately at low prices, and quality-based pricing remains impossible. While digital platforms like e-NAM have been introduced, they haven’t been backed by physical upgrades in mandi facilities somewhere they just act as a escape system.Without this, e-NAM becomes just a digital layer on a broken foundation. We need a Mandi Infrastructure Renewal Mission funded by the central government, targeting solar-powered cold storage, weighing bridges, packaging units, and sorting machines. Brazil implemented this modernization program in their BCONAB (National Food Supply Company), modernized which ultimately boost their food security and farmer income.  

Currently, there’s no independent system for farmers to address grievances like price rigging, delayed payments, or rejected produce.In APMCs Farmers also lack representation on APMC boards in most states, violating democratic principles. A authorities like the National Mandi Oversight Authority should be created to ensure farmer representation on APMC boards—with at least 33% of seats reserved for women and SC/ST farmers. This ensures accountability, democratization, and alignment with the constitutional goal of social and economic justice. Instead of bypassing APMCs through corporate-friendly reforms (like the repealed 2020 Farm Laws) and E-NAM, India must rebuild them into modern, decentralized, and farmer-controlled institutions. With targeted investments, legal clarity, digital transparency, and the inclusion of smallholders and FPOs, APMCs can again serve their original purpose: delivering fair prices, market access, and dignity to Indian farmers.  

PM-KISAN Reform: From Popular Politics to Purposeful Policy

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While the scheme was revolutionary in its scale and directness, it suffers from flaws in design, inclusion, and sufficiency. PM-KISAN operates on the assumption that land ownership defines farmer identity thereby it exclude tenants, sharecroppers, and landless cultivators, especially in tribal and eastern states. Additionally, the flat amount of ₹6,000 is too meagre, considering the rising cost of cultivation and inflation. Thus, PM-KISAN needs significant reform to serve as an effective income safety net rather than a symbolic gesture. According to the NSS 77th round survey, only 41% of agricultural households own land titles, and about 60% of cultivators in Andhra Pradesh and Telangana are non-title holders. This exclusion violates the very principle of universal basic income support in agriculture.

PM-KISAN must adopt a more inclusive identification method, such as they should start accepting Panchayat-certified cultivator declarations for tenant and sharecropper farmers including women co-owners, even if they are not the primary titleholder.And by using FPO membership records, irrigation tax receipts, and crop loan histories as valid proof of cultivation. Such expanded criteria are used in Brazil’s which prioritize actual tillers over legal title holders. The static ₹6,000/year transfer does not reflect variations in input costs across states, crop types, and agro-climatic zones. The static amount also fails to account for inflation or crisis-related shocks like drought or pandemic disruptions. If the central government is not able to increase this static amount, it should at least allow states to offer additional income top-ups, with partial central support, PM-KISAN is often used by governments for short-term electoral gains, being announced or boosted just before elections. This diverts attention from deeper reforms in land rights, irrigation, pricing, or climate risk. As a result, PM-KISAN remains a political gift rather than a foundational tool for income security. To prevent this, the scheme must be de-politicized and structured into a rights-based income framework.

From Minimum to Meaningful: Recasting MSP for Real Impact

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MSP is not a pan-India safety net but a regionally skewed system.One major problem is that it's largely concentrated in just two states: Punjab and Haryana. This creates deep regional inequality, where farmers in non-procurement states are forced to sell below MSP. States must be empowered and incentivised to run their own decentralised procurement networks, modeled after Chhattisgarh’s successful paddy procurement and Odisha’s kharif MSP expansion. The Central Government should offer matching grants to states to procure more than 50% of their eligible crop and integrate this procurement with the Public Distribution System (PDS) to ensure regional grain diversity. This model will significantly reduce the over-reliance on the FCI and bring procurement closer to the farmer.The second major problem is the lack of legal enforceability. One of the major demands of protesting farmers during the 2020-21 agitation was a legal guarantee for MSP, as the current MSP is a non-binding and informal announcement. What the government can do here is instead of making all 23 MSP crops legally enforceable (which would be fiscally impossible), offer a legal price guarantee for select strategic crops. Rainfed and food security crops such as millets, pulses, and oilseeds should be prioritised. Legal MSP should be supported with price floor laws, enforced through local agriculture officers or price monitoring cells. Contracts in private mandis must carry a clause that the minimum price cannot fall below MSP for selected crops (a core demand of the farmer protests). This would ensure the partial legalisation of MSP where it matters most- in vulnerable regions and for vulnerable crops-without overburdening the exchequer.Another major problem is that many farmers sell below MSP due to urgent financial needs or a lack of procurement centres. In such cases, they receive  no compensation even if the MSP exists on paper. This completely defeats the idea of MSP as a safety net. Here, the Union government should adopt a Price Deficiency Payment Scheme, similar to the one used in Madhya Pradesh’s Bhavantar Bhugtan Yojana and China’s target price subsidy. In this model, farmers are free to sell in the open market. If the market price is lower than MSP, the government pays the difference directly to the farmer's bank account. This system should be digitally linked with eNAM and mandi registration to ensure transparency and avoid fraud. This will allow the market to operate freely while ensuring MSP acts as an income floor, not just a procurement price.

Implementing the C2 + 50% Formula: A Policy for Income Security and Agrarian Justice

One of the most consistent demands of India’s farming community that heard is every protests and movement - is the implementation of the C2 + 50% Minimum Support Price formula, which was originally proposed by the Swaminathan Commission (2006). This proposal is more than a pricing formula it is considered as the vision of agricultural justice, where farmers receive not just cost recovery, but fair returns for their work, land, and investment. The NABARD Report 2018 flagged that over 50% of agricultural households are in their average monthly income is below ₹11,000, and in this case implementing C2 + 50% MSP can serve as a foundational pillar for ending chronic agrarian distress. Currently, the official MSP is calculated based on A2 + FLwhich includes out-of-pocket expenses and the imputed cost of family labour. However, it excludes key components like land rent and interest on capital assets, which are critical for small and marginal farmers who use their own land, tractors, and savings. This underestimation leads to price support that is well below real costs, forcing farmers into debt and distress.

The current MSP calculation used by the government mainly relies on the A2 + FL formula, whereas the Swaminathan Commission recommended MSP = C2 + 50%. The difference between these two approaches affects millions of farmers’ livelihoods.

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Example:

Cost Component Example Value (₹/quintal)

A2 ₹800

FL ₹200

A2 + FL ₹1,000

Imputed rent + capital interest (C2 elements) ₹400

C2 ₹1,400

C2 + 50% ₹2,100

• Government's current MSP (A2+FL + 50%) = ₹1,500

• Swaminathan recommended MSP (C2 + 50%) = ₹2,100

This two method create a difference of ₹600 per quintal which is significantamount from the Indianfarmer perspectives. According to NITI Aayog and CACP data (2019–22), many farmers sell crops below even A2 + FL MSP,.Crops like tur, urad, moong, groundnut, and millets often fetch 15–30% below C2 cost, especially in non-procurement states.The core of India’s farm crisis is not just market failure—it is a price-realization failure rooted in flawed cost accounting. By continuing with A2 + FL, the government underestimates farmer needs and overstates its support. Transitioning to C2 + 50% is thus not merely a technical fix; it is a moral and economic correction—one that acknowledges the full value of farmers’ effort, land, and capital

Reaching to Conclusion 

Farmers in India are still dying by suicide. It is no longer a shock it has become the new normal. The data, year after year, confirm a human cost we seem unwilling to confront. In Maharashtra, the epicenter of this ongoing catastrophe, farmers cultivating cotton, pulses, and oilseeds continue to slip into debt, not because they failed to produce, but because the system failed to protect them from the volatility they did not cause. Beneath this crisis lies a deeper history—of promises unfulfilled, structures unreformed, and voices ignored. This is not a failure of one policy or one party. It is the cumulative effect of decades of institutional neglect, where Indian agriculture was pushed to the margins of economic planning.. The Green Revolution, though celebrated, was narrow in scope- concentrated in a few northern states and built upon state subsidies without a long-term vision of sustainability or equity. It generated input dependency, market rigidity, and ecological stress, all of which are now compounding distress in rainfed and tribal regions. Today’s flagship schemes:PM-KISAN, PMFBY, Soil Health Cards, e-NAM-are well-meaning but superficial. They are data-blind, design-fragile, and often technocratic in nature, lacking grounding in the lived experiences of farmers. Most are derived from administrative logics, not agrarian realities. PM-KISAN assumes landownership equals cultivation; PMFBY assumes uniform risk patterns across agro-climatic zones; e-NAM assumes digital literacy and infrastructure where neither exists. These schemes are stuck in policy templates that were outdated even before they were implemented. Meanwhile, the government continues to view agriculture through the lens of market enthusiasm and global competitiveness- taking cues from the WTO and trade liberalization rather than local distress and food sovereignty. But agriculture in India is not a commodity sector-it is the foundation of the rural economy, cultural identity, and ecological balance. A “market-first” approach, rooted in neoliberal policy logic, cannot address the social embeddedness and vulnerability that characterize Indian farming.

What is needed now is not mere reform, but reconstruction. The state must overcome its hesitation to act as a developmental institution--not a facilitator of private capital, but a guarantor of agrarian justice. This requires rethinking subsidy logic, investing in public procurement infrastructure beyond Punjab-Haryana, legally guaranteeing remunerative prices (C2 + 50%), recognizing tenant and landless farmers in policy design, and rebalancing the rural-urban policy divide. It also means putting the farmer back at the center of agricultural policymaking-not as a beneficiary, but as a stakeholder and citizen.