Odisha Assembly polls: Political parties are trying to woo farmers

With the BJP and Congress promising farm loan waiver, there is little option for the Naveen Patnaik government

With the elections, to the Lok Sabha and the Odisha assembly, months away, political parties are out to woo farmers, who are reeling from distress sales of farm produce, increases in input cost, and the impact of climate change on agriculture.

Of all the agricultural issues in the state, waiving farm loans occupies centre stage.

The demand for farm loan waiver in Odisha is being talked about ever since the Yogi Adityanath government did it in Uttar Pradesh last year. And it gained momentum with the BJP and Congress turning vocal on the issue. The leaders of both the parties — Central ministers Juel Oram and Dharmendra Pradhan (BJP) and state Congress President Niranjan Patnaik — have accused the state government of doing little for the farmers, many of whom, unable to bear the pressure of loans, have committed suicide. 

The BJP and Congress stalwarts have said should their party come to power, they will write off all loans.

Such electoral promises by the two main opposition parties, with their party manifestos still to be written, have charged up the political atmosphere in the state. Considering the sensitiveness of the demand from the farm sector, which engages 65 per cent of the state’s population, the government has no option of ignoring the matter unless the ruling Biju Janata Dal (BJD) risks losing its hold on the farming community.

With the write-off imminent, ministers and officers are now running themselves into the ground to estimate the impact of such a dole on the state’s finances. According to a report of the State Level Bankers’ Committee (SLBC), the value of farm loans stands at Rs 266 billion as of March 31, 2017. Of the total, which includes crop loans and term loans, the unpaid dues of commercial banks and regional rural banks (RRBs) were Rs168 billion and the cooperative banks Rs 97 billion.

If the state government decides to give a major relief to farmers affected by adverse market situations and recurring natural calamities, over 5 million farmers will gain from the scheme.

The report has given provisional fund requirements for loan waivers in various slabs. The state government has to decide a cap on the loan waiver amount and the beneficiaries (all loanees or non-defaulters only). 

“A farm loan waiver up to Rs 50,000 per loanee farmer will put a financial burden of Rs 246 billion (for all banks). If only a crop loan is waived, then the cost to the government will be Rs 201 billion. If around Rs 20,000 per loanee is waived the burden on the exchequer will come down to Rs 150 billion,” said a government official.

The UPA government gave a loan waiver in 2008, when Rs 26.15 billion, given to nearly 2 million farmers of the state, was written off.

But unlike the 2008 waiver, the load of which was borne by the Centre, the huge financial burden is likely to fall on the state this time. This is a major cause for concern for the government, which is facing a resource crunch this fiscal year.

Meanwhile, Chief Minister Naveen Patnaik promised a group of farmers to examine the loan waiver proposal. He has also sought to pass the buck to the Centre by writing to Prime Minister Narendra Modi on June 18 and demanding that there should be a national policy on loan waiver. “In order to relieve farmers of the agrarian distress, we should have a national policy on farm loan waiver. The state government would be willing to support any initiative taken by the Central government in this direction,” the letter said.

BJD spokesperson and MLA Amar Prasad Satpathy said: “Farm loan waiver is not the only way to farmers’ prosperity. The government has initiated a series of measures. Farm loan is being given at 1 per cent interest. The government has taken pioneering steps to provide bank loans to share croppers”.

But with the demand of the Congress, BJP and farmer lobbies getting louder after the announcements of loan waiver in states such as Uttar Pradesh, Maharashtra, Punjab, and, more recently, Karnataka, the government has little room to manoeuvre.