The determination of eligibility for the loan waiver should not be done on the quantum of land held. | |
| The budgetary provision for farmers' loan waiver superficially indicates some relief to distressed farmers. But actually the decision seems to have been taken without taking into consideration the factual position of farmers' plight.The differentiation of the farmers' fraternity as small, marginal and big should not be based on the quantum of land, since it is actually based on the quality of soil, the nature of crop production and crop prices, if they are based on the cost of production. The debt burden should, therefore, be decided on these various factors rather than on the acres of land held. |
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| The loan waiver based on the quantum of land holding is, therefore, deceptive and needs urgent correction in the larger interests of the farming sector. A farmer owning six hectares of land but without any irrigation facility is small and poor as he holds jiraeet (without water) land, while a farmer holding one or two hectares but having adequate water essential for cash crop is comparatively richer. Hence, any relief based on the quantum of land without considering the quality of soil, input availability and barren portion of land is not only ill-founded but also unjust to the needy and distressed farmers. |
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| If relief is to be given, it should be on the basis of the quantum of loan up to which it should be waived. This criterion was rightly followed at the time of the last budget when the interest concession of 7 per cent was given to all agricultural loans up to Rs 300,000. This rational and factual criterion should have been followed in this budget also and the same limit of Rs 300,000 or more should have been fixed for loan waiver. If all farmers' loans up to Rs 300,000 are waived, all members of the farm sector would get instant relief and there would be no differentiation between eligible and ineligible candidates. This criterion based on amount will also be easily acceptable and easy to implement at the bank level without waiting for the determination of eligibility. |
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| The introduction of a one-time settlement (OTS) facility to the farm sector is also deceptive and ridiculous if the reality of farmers' plight is duly assessed. This is because farmers often do not get a fair price based on the cost of production and whatever they get, the payment is delayed as it is made in instalments (as happens in the case of sugarcane payments). It is, therefore, not possible for any farmer to be able to pay a lumpsum amount for OTS. To grant him considerable subsidy to reduce the loan burden is the only alternative. |
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| The ruling UPA has the opportunity to redress the wrong treatment meted on the farm sector. While the co-operative movement encouraged by the Congress has created scope for economic activity in rural areas, it has also generated inequality. The formation of co-operative sugar factories, milk dairies as also banks is based on a political strategy of utilising the co-operative structure for an assured vote-bank. The three-tier co-operative banking system at the village, district and apex level has benefited political bosses at the cost of villagers who pay 14 to 16 per cent interest for their farm loan disbursed by the World Bank and the National Bank for Agricultural and Rural Development (NABARD) at only 3 to 4 per cent interest. Due to a lack of priority in policy to the rural sector during the initial stages, the nationalised banks also failed to reach the farm sector with adequate credit and concession in interest rates. The result was that farmers had to rush to private money lenders for family requirements like marriage or sickness, and were forced to accept money at huge rates of interest. The government has not considered this situation while coming to a decision regarding the waiver of loans. |
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| After jubilation over the budgetary relief, Union Agricultural Minister Sharad Pawar asked farmers not to pay back the debt taken from unauthorised private money lenders. But is it possible that farmers, who are much more dependent on private money lenders than on banks, will question these money lenders on their authorisation and deny them their dues? This is the vital question. |
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| Following reports of farmer suicides, the governments, both at the Centre and in the states, had a glimpse of the harsh reality at the grassroots. But the bankers' mindset has not changed for the better and the expected response from the nationalised banking sector is either slow or indirectly negative. This is because the agricultural lobby is not strong enough to influence the governments' decision-making process. |
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| The finance minister of any government routinely meets representatives of industry before preparing the budget but agricultural requirements are not studied either by inviting representations or by voluntarily approaching the rural sector. The finance minister says he relied on recommendations of the R Radhakrishna committee which is, in any case, not a farmers' representative committee. This is the reason why the budgetary decision is based on haphazard and ad-hoc realisation of facts. |
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| For instance, the definitions of and the criteria for the small farmer versus the small-scale industrialist are based on different connotations, and are, therefore, discriminatory in nature. The small-scale industrialist who is eligible for a number of concessions and facilities is one who has a turnover of Rs 5 crore. This is obviously a very liberal connotation. Even while waiving the loans of industrialists, an amount of Rs 125,000 crore is disbursed, while for farmers, it is only Rs 60,000 crore. |
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| While defining a small farmer, the criterion for the eligibility of concessions such as the loan waiver is fixed at two hectares of land. This means a considerable number of farmers who own more than two hectares (or five acres) of land but who are distressed because of minimum crop production and low prices for agricultural produce (not based on cost of production) are kept out of the purview of the eligibility for getting any relief. In fact, as explained earlier, the concept of a "small farmer" should be based on the quality of land, say, ten acres with water facility or twenty five acres without any facility for growing an adequate crop. Since this consideration is lacking in fixing the eligibility for loan waiver, it is imperative to correct the mistake and allow more farmers to be partake of the waiver relief. This is urgently necessary to avoid any farmer unrest. |
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