What Is Farm Distress Index And Why Has The Centre Set It Up?

The government has introduced a Farm Distress Index to help local authorities detect and respond to worsening conditions for farmers, their crops, and their livelihoods. This index is designed using 21 parameters and aims to provide early alerts so that timely interventions can be made, officials stated.

Need for an Early Warning System

Experts at the Central Research Institute for Dryland Agriculture (CRIDA), who were involved in creating the index, emphasized the importance of early detection. They noted that hardships in farming can have serious economic and emotional consequences, but these can be mitigated with an effective advance warning system.

“Agricultural distress is a complex phenomenon and is not triggered by any one cause. It is an interplay of income, financial profile as well as economic decisions by farmers. Distress often results from factors such as crop failures, miscalculating returns and weather shocks,” said R Mani of Tamil Nadu Agricultural University.

Nearly half of India’s population depends on farming for their livelihood. Agriculture contributes around 17% to India’s Gross Domestic Product (GDP), making it a crucial sector for economic growth in Asia’s third-largest economy.

How the Index Works

The distress index is structured into seven sections, each containing three questions. Based on the responses, authorities can assess whether farmers are under distress or at risk of facing difficult conditions.

“The index is very simple and has seven sections of three questions each. By analysing the answers, it will be possible to know whether they are experiencing any distress or face conditions that may lead to stress,” said A Amarender Reddy, the design head of CRIDA, a wing of the Indian Council of Agricultural Research.

Impact of Farm Distress

Farm distress has led to devastating consequences in several states. Crop failures and mounting debts have often resulted in farmers taking extreme steps. For example, in Maharashtra alone, 2,851 farmers died by suicide in 2023 due to agricultural distress, as per data from the state relief and rehabilitation department.

A majority of India’s 220 million farm households depend on subsidies and loans to manage cultivation costs. With climate change leading to extreme weather events, farmers often struggle to recover from financial losses caused by crop destruction.

Link to PMFBY and Rural Credit System

The distress index has been developed under a Nabard-funded initiative called “Farm Distress and PM Fasal Bima Yojana (PMFBY).” Nabard, the National Bank for Agriculture and Rural Development, is India’s largest rural creditor. The goal of this project is to strengthen the reach of PMFBY, a subsidized crop insurance scheme introduced by the government.

Mani emphasized that formalizing credit systems and improving public insurance programs such as PMFBY can significantly reduce distress. However, he also stressed that these facilities must be efficient and easy to administer to have a meaningful impact on farmers.

Using Technology for Monitoring

The data collected for the Farm Distress Index will be processed through an Android-based mobile application. This tool will help analyze distress levels in real-time, especially in drought-prone dryland areas such as Telangana, Andhra Pradesh, Karnataka, and Maharashtra. The application is expected to improve intervention strategies and provide better support to farmers in need.

A survey conducted in 2019 by the National Sample Survey Office (NSSO) on the Situation Assessment of Agricultural Households and Land and Livestock Holdings revealed that approximately 58.3% of rural households in India rely on agriculture as their primary source of income.