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Farmer Distress Index (FDI): NABARD

Posted on April 29, 2022 by admin1  1006

In Context 

  • The National Bank for Agriculture and Rural Development (Nabard) is planning to formulate a Farmer Distress Index (FDI) to track, identify and support “needy and distressed farmers.”

About Farmer Distress Index (FDI)

  • It can integrate the available high-frequency data on key agricultural variables like deviation of monsoon rains, excessive rainfall, drought and dry spells, variations in temperature and soil moisture, and yield of major crops in the district, among others.
  • It can be used by the policymakers and the government to plan and design a timely and targeted method of supporting distressed farmers.
    • Depending on the level of distress, the government and the financial institutions can decide on an appropriate package of support instead of the current practice of doling out distress packages to all the farmers across the board. 
  • It won’t be uniform across the country as it changes from place to pace depending on the stress levels. 

Significance 

  • According to a study, more than 60 per cent of the ‘very high’ and ‘high’ distress small and marginal farmers (SMFs) did not receive farm loan waiver (FLW) benefits. 
    • The exclusion rate was also 60 per cent for the medium distress category SMFs.
    • It will help really needy and distressed farmers. 
  • It will also help the entire financial sector, government departments and insurance companies. 

National Bank for Agriculture and Rural Development (Nabard)

  • About: It is an apex regulatory agency for Regional Rural Banks and Cooperative Banks under the jurisdiction of the Ministry of Finance.
  • Establishment: In 1982 on the recommendations of B.Sivaraman Committee to implement the National Bank for Agriculture and Rural Development Act 1981.
    • It replaced the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of Reserve Bank of India, and Agricultural Refinance and Development Corporation (ARDC).
    • The initial corpus of NABARD was Rs.100 crores.
  • Aim & Objectives: Promoting agriculture and rural development through participative financial and non-financial interventions, innovations, technology and institutional development for securing prosperity.
  • Functions: Refinance support for building rural infrastructure.
    • Prepares district level credit plans to guide and motivate the banking industry in achieving these targets.

 

Source:IE

 
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