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60% of the country’s cultivable land (80 million hectares out of 135 million
hectares of net area shown). Associated with this has been the neglect of the need
for pursuing social mobilization, institution-building and leadership formation
at the grassroots level which had initially made positive impact of watershed
development programmes for drought proofing of rain-fed agriculture by
conserving land and water resources. Proposal now made by the government
to set up a National Rainfed Areas Authority, if pursued effectively, is in the
right direction (Planning Commission 2006).
Thirdly, there has been the absence of any concerted public policies
to promote absence of diversification in agriculture in consonance with the
needs of a diversified economy leading to improved consumption patterns of
households and also in consonance with the policies of external liberalisation;
a diversified agriculture could take advantage of the benefits of external trade
in horticultural products in which the Indian economy may have comparative
advantages. It is only now that a special focus on horticultural products has
been bestowed.
Fourthly, what stands out is the failure to promote the next generation
of appropriate technologies as well as institutional arrangements to filter
biotechnologically improved seeds imported from abroad and supplied to
farmers by private agencies; associated with this factor is the weakening of the
extension system which has multiple roles in propagating improved cropping
patterns, application of appropriate mixture of nutrients and dissemination
of the knowledge of new technologies, The fifth reason for the continued
dependence of millions of small and marginal farmers on their low-productivity
and low-income agriculture is the failure to promote rural industrialisation
and non-farm activities in general.
A final but most dominating reason has been the weakening of the rural
credit structure and the inability of the system to strengthen credit delivery
arrangements for agriculture which is the subject matter of this study. A large
number of farm households (about 46 million out of 89 million or 51%) are
excluded from the availability of any credit arrangement, let alone institutional
finance, because of the weaknesses in the credit delivery mechanism.
Farmers’ Views on The Crisis – An Aside
In a thought-provoking article on the situation in rural India, Gupta
(2005) argued that, both culturally and economically the Indian villages are
undergoing major structural changes and facing a serious sense of apathy
and helplessness. Village landholding structure is such that there are few jobs
