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Can cash transfer model solve the agricultural crisis?

Recently states like Telangana and Odisha governments start direct benefit transfer to farmers like Rythy Bandhu and Kalia scheme respectively. Even central government through interim Budget announced 6000 rupees and DBT to farmers who have farmland less than 2 hectares.

Benefits of such scheme :

  • Supplement loan – farmers need not search for investments is the start of the season.
  • Farmers moving to informal sources like money lenders for want of money can be lessened. There is a chance of clearing finance suicides.
  • Delay in crop season due to lack of money can be minimized.
  • Farmers have the freedom to spend their money.
  • It may decrease the recent populist idea of farm loan waivers.


  • 6000 rupees announced by the central government was meagre to support the needs of farmers to start a growing season.
  • Farmers may not spend their money is the required manners helpful for farming. They may divert to buy alcohol or etc which are not helpful.
  • It may enhance the fiscal burden on the governed and widens the fiscal deficit.
  • It may discourage farmers from behaviours as they stop working, as they are getting free money.

Way forwarded:-

  1. So what needed is along with this government should take these steps like
  2. Organic farming

Increase the productivity of farming:

  1. Increasing more investments in farming to increase its productivity.
  2. Food wastage should be minimized. This can be done by increasing the spread of the food processing industry.
  3. People should be encouraged to think innovatively and rather than following stereotype farming, encourage them to think innovatively like diversifying, mechanization, using artificial intelligence, drones etc.

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