Farmer Distress Index (FDI): NABARD

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. 

Source:IE