Loan waiver: some farmers happy, some sceptical

March 1st, 2008 - 7:05 pm ICT by admin  

A file-photo of P. Chidambaram

New Delhi, March 1 (IANS) Finance Minister P. Chidambaram’s budget announcement of a Rs.600 billion ($15 billion) farm loan waiver has been populist, but many farmers, including his own uncle, doubt if the move will abate the increasing number of farmer suicides. The strongest disapproval came from the finance minister’s family members - many of whom are in the sugarcane business. Chidambaram’s 77-year-old uncle Komathi Chettiyar, living in Karaikudi in South Tamil Nadu, said: “I am not happy about the announcement.

“The waiver does not really help the farmer in need. Farmer suicides are not taking place because they default with banks. It is due to the harassment by private moneylenders. And now taxpayers are to bear the brunt of this waiver,” Chettiyar pointed out.

In his budget speech Friday Chidambaram announced agricultural loans given by public sector banks and financial institutions will be waived to help small and marginal farmers. This will benefit as many as 40 million farmers with small landholdings.

In Maharashtra, whose Vidarbha region has witnessed the maximum number of distress suicides, farmers echoed Chettiyar’s views.

“Those who commit suicide have taken loans not from the banks but from landlords or local village moneylenders at exorbitant rates of interest,” said Vijay Kedia, a farmer from Aurangabad in Maharashtra.

Terming the budget announcement as a “feel-good factor”, he said the government must ensure that the allocation in the budget reaches those farmers who are trapped by the unorganised banking system comprising moneylenders.

Deepak Shivalkar Guhagarh, a farmer from the coastal Konkan region, around 350 km south of Mumbai, was happy with the allocation made by the finance minister.

“However, this is at best a temporary and political solution. There should be permanent solutions to save the farmers from the greedy moneylenders. The solutions include better irrigation facilities and supplying better quality fertilisers and pesticides, which will ensure enhanced yield from even small farm holdings,” Guhagarh said.

Jagdish Pradhan, president of the Sahabhagi Vikash Abhiyan, a farmers’ group in Orissa, said the government should have chalked out a plan to identify the deserving farmers and provide them with some special schemes instead of writing off the loans.

“It is not a good sign for the agricultural economy. It is also not good for the government,” Pradhan said in Bhubaneswar. “The farmers need a good market to get remunerative prices for their products and not doles like this.”

Tamil Nadu Vyavasaigal Sangam general secretary K. Balakrishnan agreed. “Only remunerative prices and proper calamity insurance for crops can reduce the hardships India’s small farmers face,” he said.

With a large number of farmers in Punjab and Haryana having small land holdings, Chidambaram’s sops are expected to benefit many of them. But Punjab farmers say the sops will not reach everyone in the state that is considered the granary of India.

“Only farmers who have availed loans from banks will benefit from these concessions. But who will bail out those who are trapped by the private moneylenders?” asked farmer Harbans Singh of Mullanpur Garibdas village in Punjab.

Recent government studies have shown that the farmers’ debt in Punjab stood at over Rs.250 billion. More than half of that was to private moneylenders.

There are also apprehensions over the implementation of the scheme. “We will know the exact benefit of the budget waiver only when it is implemented by banks,” said agriculturist Amarpal Singh from Jandiala near Amritsar.

“I hope the benefits will go to the real farmers and the schemes do not remain on paper,” commented Kabbu, a farmer from Jaipur.

His friend, Banwari, was upset because the finance minister drew a line between big and small farmers. “A farmer is a farmer,” Banwari argued.

Sharad Joshi, the leader of Shetkari Sanghatana and Rajya Sabha MP, echoed the same feelings.

“Why has the finance minister distinguished between small and marginal farmers and other farmers? This is like recognising the creamy layer among the farmers,” Joshi alleged.

Karnataka Rajya Raitha Sangha (state farmers’ association) president K.S. Puttanaiah added: “The debt waiver is good but discriminatory. By limiting the waiver to small and marginal farmers, the government is dividing us. We are not against the decision per se. It should be applied to even those who hold more than one-two hectares of land since agrarian problems are the same for small, marginal and big farmers.”

But many farmers were buoyed by the announcement.

“It (the waiver) is good for farmers actually. However, if it is crop loan it will have a limited impact,” said Anuradha Talwar of the Paschim Banga Khet Majoor Samiti, an agricultural workers’ union in West Bengal.

“The rural resources have to be improved as well,” she added.

“Finally our finance minister has come out of the air conditioned room to do something for real India,” beamed Ram Saran, a national award winning farmer from Barabanki district of Uttar Pradesh.

Some farmers from Rajasthan were also upbeat. “We have lost all our crops in the frost. The loan waiver will certainly help farmers like me to stand up again,” said Ladu Ram of Shivdaspura.

Eminent farm scientist M.S. Swaminathan, who hoped that the announcement would mark the beginning of the end of the farmer suicides era, said Chidambaram had provided a multi-pronged strategy to address the major challenges facing the Indian agrarian sector.

“The budget provides a three-pronged strategy to address these issues. First and foremost is the debt waiver,” Swaminathan, who is known as father of the green revolution in India, told IANS in Chennai.

(With inputs from Chennai, Bangalore, Bhubaneshwar, Jaipur, Chandigarh, Mumbai and Kolkata)

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