'KALIA' a better alternative to farm loan waivers? Odisha scheme decoded

Kalia scheme will provide financial, livelihood, cultivation support along with insurance support to small, marginal and the landless farmers

The rising farm distress has prompted many states to look for alternatives to provide relief to farmers, with many chief ministers announcing loan waivers and some implementing major schemes. Odisha's Naveen Patnaik is showing the country a new way under 'KALIA' programme, which is expected to provide financial, livelihood and cultivation support along with insurance support to small, marginal and the landless farmers. But the crucial question is - is the scheme a better alternative to farm loan waivers?
The Krushak Assistance for Livelihood and Income Augmentation (KALIA) scheme would benefit about 92% of the farmers in the state and the government has earmarked Rs 10,180 crore for the plan in 3 years.

Here's what Patnaik got right through his KALIA scheme:

What is Kalia scheme?

KALIA scheme stands for "Krushak Assistance for Livelihood and Income Augmentation".

5 major features of this scheme that could benefit farmers:

1) Assistance for cultivation: Financial assistance of Rs 25,000 per farm family over five seasons will be provided to small and marginal farmers so that farmers can purchase inputs like seeds, fertilizers, pesticides and use assistance towards labour and other investments from 2018-19 to 2021-22.

2) Assistance for Livelihood: Financial Assistance of Rs 12,500 will be provided to each landless Agricultural Household for agricultural allied activities like for small goat rearing unit, mini-layer unit, duckery units, fishery kits for fisherman, mushroom cultivation and bee-keeping, etc.

3) Assistance for vulnerable agricultural household: Vulnerable cultivators and landless agricultural labourers will get financial assistance of Rs 10,000 per family per year to enable them to take care of their sustenance. The vulnerable cultivator and landless agricultural labourers those who are in old age, having disability or disease and are vulnerable for any other reason.

4) Life insurance for cultivators & landless agricultural labourers: Life insurance cover of Rs 2 lakh at a very nominal premium of Rs 330/ will be provided to all savings bank account holder of age between 18-50 years. Odisha government will bear farmers’ share of the annual premium of Rs 165. Personal accident cover of Rs 2 lakh at a very nominal annual premium of Rs 12 for all savings bank account holder aged between 18-50 years. Out of Rs 12 towards premium, Rs 6 is the farmers’ share, which will be borne by the state government. A beneficiary whose age is between 51-70 years, the entire amount of Rs 12 towards annual premium will be borne by the government.

5) Interest-free crop loan: Vulnerable landless labourers, cultivators and agricultural families identified by Gram Panchayats will be provided with crop loans up to Rs 50,000 made available at 0% interest.

Why BJP and Congress must listen to Odisha Chief Minister Naveen Patnaik

With KALIA, Naveen Patnaik has refused to write off farm loans. Meanwhile, he is helping maintain repayment discipline in the banking system.

Loan waivers penalise honest farmers who repay on time and can discourage them from doing so. According to Naveen Patnaik, of the 32 lakh cultivators in Odisha, only the richest 20 lakh have farm loans, and they should not be the main beneficiaries of an anti-distress programme.

Shortcomings of KALIA model

Kalia model is difficult to implement. Since Odisha is a backward state with fewer financial and administrative resources, the government may face great difficulty in implementing the scheme.

The five major aspects of the schemes are as follows:
 

1) Financial assistance to the farmers
 

2) Livelihood assistance to landless families
 

3) Support to landless labourers and vulnerable agriculture households
 

4) Insurance cover
 

5) Interest-free crop loan