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POLICY CHALLENGES

Updated: Nov 17, 2020

The state of Maharashtra has seen increased economic growth in recent decades, and Mumbai, the state capital, is considered the financial and commercial hub of the country. Although the state's western metropolis has experienced promising growth, the vast rural agrarian area to the east (including Umarkhed Taluk) is being left behind. The widening gulf in fortunes is, in part, due to public policies that favor industrialization and urbanization and under-attend to rural areas and agrarians. The majority of the households in the state rely on the agricultural sector as their main source of income. However, poverty persists among farmers.

Agriculture policies in India promote increased production and aim to provide support for farmers. Unfortunately, several prominent policies do not adequately reflect the needs of a diversity of farmers, crops, and regions. Thus, these policies either fall short or perpetuate the nation's well-documented agrarian crisis.

Given its inadequate infrastructure (housing, drinking water, electricity, latrines, transportation, etc.), and high levels of poverty, hunger, illiteracy, and morbidity, the Yavatmal region has been deemed a "backwards region" by the central government, rendering it eligible to participate in the Backwards Region Grant Funding program. This program was designed to fill the infrastructure gaps through development and capacity-building grants (e.g., for building irrigation channels and enhancing soil and water conservation measures}. However, the funds have been underutilized or subject to misappropriation.



In recent decades, the central government has experimented with dozens of schemes to increase livelihood for farmers, such as the Employment Guarantee Scheme, Mahatma Gandhi National Rural Employment Guarantee Act (MGNR EGA), Soil Health Card Scheme & the Public Distribution System to name a few.

These schemes have had limited efficacy and sometimes produced unintended consequences. For example, MGNR EGA aims to add labor to farms. By focusing on workforce size rather than productivity, labor costs have gone up, and farming has become less profitable. Also, the majority of the funds from this scheme are distributed via middlemen, who too often have left MGNREGA laborers unpaid or underpaid.


Many critics note that Indian agricultural policies do not effectively target methods of farming most in need of support, such as rain-fed farming. The farming methods in the Yavatmal region predominantly depend upon rainfall and seasonal monsoons, which have become erratic, leading to crop failure.

Rain-fed areas are correlated with higher levels of crop failure and poverty. The government significantly subsidizes high-yielding seeds and fertilizer - which fare best in robustly irrigated areas. At the same time, public investment in integrated water management programs is low, putting irrigation innovations out of reach for smallholders in and around the Umarkhed region.


When crops fail, burdensome farmer debt balloons. The Pradhan Mantri Fasal Bima Yojana (PMFBY) scheme was launched to provide comprehensive insurance to farmers to ensure income stability during crop failure. However, the funds are essentially transferred to private insurance companies that are very slow to pay farmers.

The government also formed a market intervention strategy known as the Minimum Support Price (MSP) program where the government purchases the farmers’ entire harvest when the market price falls below the established minimum price. While the MSP has the potential to safeguard farmers when prices fall, the efficacy is tied to the setting of a fair, predictable, liveable MSP. But in Maharashtra, the proposed and actual MSP prices can differ by as much as 70-80%, leaving farmers without adequate or reliable financial support in times of market dysfunction.

Given that national policy has not adequately addressed the challenges facing rain-dependent, small-holder farmers and has not developed sufficient policies to address shifts that will need to occur to account for climate change, water crisis, and resource conservation, the people of Umarkhed need technical and economic assistance from other sources. The MPA Vision, consisting of MPA Farming, the MPA Transition Support Program, and the MPA Local Food Policy & Economy, Advisory Board strive to bridge the gap and address those needs.

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