Unseasonal rains, failed crops and farmers' suicides

Abstract

In recent weeks, on account of unseasonal rains, crops have suffered in North India. According to reported estimates, rabi crops in about 113 lakh hectares have been damaged. However, crop failures due to floods, droughts, hailstorms and other natural calamities are a regular phenomena in India. To address such issues, the government has launched crop and weather insurance schemes. As with any other insurance scheme, there are difficulties in making claims and availing appropriate amount in time. Finally, in most of the cases, the government announces relief to the farmers from the budget, impacting fiscal policy. And then, the government instructs the Reserve Bank of India to accommodate farmers of affected areas by permitting some interest rate relief. Commercial banks, especially public sector banks, will be advised to help by either waiving or restructuring loans, impacting monetary policy.

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