Dr. Parveen Kumar & Dr. R. K. Arora
The country presently is plunged in a deep agrarian crisis. Farm distress has now assumed national importance, farmers leaving agriculture is now giving sleepless nights to the planners and policy makers while farmers committing suicides is now a national shame. A report of the National Sample Survey Organization reveals that the number of cultivators in the country has declined from 16.61crores in 2004-05 to 14.62 crores in 2011-12 and if the number of cultivators keep on declining at the same rate; it would result in further reduction of the number of cultivator by 13.4 per cent between 2015-16 and 2022-23. Although thousand of crores of rupees are being spent annually by the Government on various farm and farmer welfare related programmes; yet the outcome is not that is being expected of.
If we look at the past, we have to believe that a chemical based, monoculture model of agriculture has been handed over to the farming community. What was green revolution based on? Chemical based fertilizers that were used indiscriminately and the ill effects are now being seen by everybody. This monotheistic model of agriculture has exploited nature, degraded our soils, polluted our water bodies, lost our biodiversity and made youth to quit this once so called noble profession. Even after five to six decades of the green revolution, about 69 per cent of the total area under cereal crops is under High yielding varieties. If we take the case of paddy alone the figure comes down to 62 per cent even though some states have 100 per cent coverage of rice under HYV. Timely credit, provision of insurance for crops and livestock, affordable fertilizers and plant protection chemicals, storage structures, food processing and value addition and a more remunerative price for the agriculture produce are some of the major factors which still elude the farming community. Lack of credit facilities force the farmers to take loans from the private players at huge interest rates. This accompanied with a high input cost, vagaries of weather and a decline in production at the farmer’s field make the farmer unable to pay the debt from even institutional sources. This results in their huge indebtness ultimately leading to suicides.
This has led many State Governments to waive off the farm loans as a populist measures to get votes. Some years back, the than United Progressive Alliance (UPA) Government had also waived off farm loan worth rupees 70,000 crores. Recently eight State Governments have given farm loan waivers worth rupees1.9 trillion since April last year, amid massive farmer protests and promises made ahead of the recently concluded assembly elections in five states. The first one was Uttar Pradesh followed by Maharashtra. Going on their footsteps, the governments in Punjab, Karnataka and Rajasthan also announced loan wavier. Now the latest announcements have come from the state governments from Madhya Pradesh Chhattisgarh, Rajasthan and Madhya Pradesh. The innocent peoples however do not know that these wavier always come with certain conditions and set a sort of wrong trend in the country. Many honest farmers who had timely repaid their loans feel being cheated. In Punjab and Uttar Pradesh, for instance, the waivers were allowed only for small and marginal farmers, who own less than 5 acres. Secondly, Governments usually set a cut-off date when they implement a waiver. Madhya Pradesh, for example, has set a cut-off date of 31 March 2018, when it approved a farm loan waiver earlier this week. This means farmers who availed crop loans in June or July for kharif planting will not benefit. Similarly in Punjab while about 70 percent of loans of marginal farmers (owning less than 2.5 acres) were waived, small farmers who own between 2.5-5 acres are yet to benefit. According to Ramesh Chand; a member of NITI Aayog the percentage of farmers who have any outstanding loans from institutional sources is not even 50%. It thus means spending lakhs and crores of rupees and not even half of the farmers are benefiting. In some of the states, not even 25 percent of farmers avail institutional credit.
This has raised some very serious question. Whether it is really a solution to the farm distress driven by drought, inadequate crop prices and falling incomes or it is merely to fetch some votes to install the government. It is an easy solution for politicians. Although they provide some immediate relief, yet they help little to solve the fundamental problem of rising costs and falling profitability in agriculture. This is the statement of Professor R. Ramakumar of Tata Institute of Social Sciences (TISS), Mumbai, and an expert on agriculture credit. Even the father of Green revolution in India does not consider loan waiver as the solution to farm distress.
Another issue in loan wavier is that the loan waivers suck out much needed public investments in other sectors of agriculture like irrigation, mechanization, storage and others. Besides they are also an attack on the common man. These are waived with tax payer’s money. Repeated farm loan waivers also end up hurting farmers as banks are often reluctant to issue fresh loans after a slump in repayments. In Maharashtra, crop loans issued during the 2017 kharif crop season were less than half the target set by the State Government. Loan waiver schemes disrupt credit discipline. Some farmers turn into willful defaulters as they wait for the next loan waiver scheme, which is bad for economy. This also serves as an indirect punishment for loan repayers. Those who repaid loan before the announcement of the scheme are at loss and those who didn’t repay loans, even if they afford to be at benefit. Sometimes even the rich farmers too may take loans even if there is no need, in the hope of the next loan waiver scheme. This ultimately impacts the farmers who are genuinely in need of loans.
Any sort of loan wavier must ensure that the willful defaulters are not given the benefit of loan wavier and those who have timely paid the loan should be given incentives. At the same time it should be ensured that farmers’ gets timely and sufficient credit facilities. The cost of cultivation should be minimized by minimizing the overdose of chemicals; facilities for procurement at Minimum Support Price announced by the government should be made available at the farmer’s field and insurance to compensate the farmers against the atrocities of weather are some of the issues that need to be taken on priority basis to save the farming community from distress.
(The authors are from Sher-e-Kashmir University of Agricultural Sciences and Technology of Jammu)
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