The long-term agricultural scenario in Telangana calls for attention going by the decline in State support for capital formation, fragmentation of land holdings and high incidence of rural indebtedness.

According to the National Bank for Agriculture and Rural Development (Nabard) data, there is a decline in the capital formation for agriculture through public investment.

Long-term credit

During 2011-12 to 2014-15, the long-term credit, which is used for investment in agriculture and is seen as an indicator for its health, declined from ₹11,112 crore to ₹8,856 crore.

“It is a concern that the share of long-term credit in overall agriculture credit is constantly on the fall,’’ Nabard said in its State Focus Paper 2016-17 for Telangana which was released here on Tuesday.

Investment in agriculture is geneally undertaken for acquiring physical assets that result in the creation of a stream of incremental income over a period time. Currently, private sector constitutes almost 85 per cent of the capital formation in agriculture.

The period under study also coincided with the interest subvention period for crop loans which might have acted as distorting factor, the apex bank for farm sector said adding that creation of capital goods is necessary to raise productivity of existing resources.

Nabard also hinted that the debt waiver and input subsidy extended to farmers as part of the election manifesto of the ruling Telanagana Rashtra Samithi (TRS) did not actually improve the scenario.

Burden on exchequer

These schemes, while burdening the state exchequer, draw upon resources that can be utilised for addressing the same issues in a more productive and sustainable manner, it observed. Referring to reports of farmers’ suicides, the bank said rampant land degradation, seasonal variation in rainfall are impeding productivity and frequent instances of drought affected small and marginal farmers.

“All-India reports confirm that Telangana is one of those with high incidence of rural indebtedness with 89 per cent of agricultural households under debt,’’ Nabard pointed

The average size of holdings in the state is lower than that of the all-India level at 1.16 ha and the position is more ‘distressing’ in respect of small and marginal farmers as their average size of land holding is 0.72 ha.

The farmers are also unaware of the latest techniques in agriculture and farm practices suitable to their soil and water schemes. The ongoing major and minor irrigation schemes need to be quickly completed in a limited time frame with intensive monitoring. “There is also a substantial gap between the potential created and utilised,’’ the bank said.