(I) High input costs:
1. The biggest input for farmers is seeds.
2. Before liberalisation, farmers across the country had access to seeds from state government institutions.
3. The institutions produced own seeds and were responsible for their quality and price.
4. India’s seed market was opened up to global agri-businesses.
5. The deregulation of many state government institutions were closed down in 2003.
6. Seed prices shot up and fake seeds made an appearance in a big way.
(II) Cutback in agricultural subsidies:
1. Farmers were encouraged to shift from growing a mixture of traditional crops to export oriented “cash crops” like chilli, cotton and tobacco.
2. Liberalisation policies reduced the subsides on pesticide and fertilizer and elasticity.
3. As a result prices have increased by 300%.
(III) Reduction of import duties:
1. With a view to open India’s markets, the liberalization reforms also withdrew tariffs and duties on imports.
2. By 2001, India completely removed restrictions on imports of almost 1500 items including food.
(IV) Paucity of credit facilities:
1. The lending pattern of commercial banks, including nationalised bank, drastically changed. As a result, loan was not easily adequate.
2. This has forced the farmers to. rely on moneylenders who charge exorbitant rate of interest.