Feud among the major political parties of India on the proposed loan waiver worth Rs 60, 000 Cr to the small and marginal farmers is still on because the centre government has not yet unveiled its mechanism for the implementation of the same. In fact this time politicians seem more concerned than the farmers since no farmers’ organization given its reaction to date. On the other hand agriculture scientists and economists are coining their own theories on the loan adjustment mechanism and are trying to make the Finance Minister disclose his formula for one-time loan settlement. And, more interestingly, the debt ridden farmers across India are very much surprised on the unanticipated concern shown by the political class. Facts and figures regarding the number of farmers on all India bases and in the different states that are to be benefited from this poll bonanza are still not clear. Views of the politicians and the agriculture economists are totally different.

In Punjab, both the SAD-BJP combine and its bete noire Congress are trying to misguide the innocent farmers by manipulating the facts and figures in the wake of coming parliamentary elections. Punjab CM Mr P S Badal and Sukhbir Badal and its party are trying to nullify the effect of this loan waiver bonanza on the rural poor in lieu of garnering votes in the coming elections. On the other hand, Congress party is turning every stone to milk this opportunity in any case.        

As many agriculture economists feel that this loan waiver wave is a temporary crisis management measure rather than a permanent solution to the ailing agriculture economy. Agriculture growth rate dropped drastically from 5.9 in 2005-06 to 2.6 in 2007-08. A temporary filling will not go for long; we have to do the root canal treatment to remove the infection inside the ailing tooth of our agriculture economy. Since most of the farmers in India are always in the need of easy loans so this lollypop of loan waiver will push them further into the debt trap. Those who have never lent any loan will be induced to take the loans which ultimately will lead to a disaster for them. So government should not give fish to the farmers but help them learn how to fish.

As per the recent survey by National Sample Survey Organization, around 42% of the farmers in India have taken loans from non –institutional sources like local money lenders. This non-institutional loan burden also needs an appropriate solution through one time settlement. At present, there is hardly any rural indebtedness act (barring Haryana) in India. The arthiyas do not have licenses to lend money to the farmers. So there is an urgent need to regulate the money lending business of the arthiyas to save the farmers from high interest rates.

Some hard policy decisions to help the poor farmers are imperative. At first, in Punjab, free power to the farm sector must go; it has proved to be a failure politically. In the last two state assembly elections, no party could garner votes on this plank. Moreover, in the last 10 years, despite free power, there has been no major improvement in the farm output. Worse, it failed to check farmers’ suicides.

Secondly, the government should give heavy subsidy on dip-irrigation system to help poor farmers; this will restore the underground water table and help reduce their power bills too.

Thirdly, the Centre’s Commission for Agricultural Costs and Prices should include the water and power costs while calculating the cost of production of wheat and rice so that MSP of the same may be raised as per their international market prices. As per the recommendations of the Commission, MSP must be declared for all the 24 agriculture commodities.

Fourthly, set up special farmers’ markets here, as in many countries, so that the farmers can sell their produce directly to consumers on retail prices and they can also earn maximum from the trade. 

And finally, the state government should set up Kisan Seva Kendras to provide genuine seeds, fertilizers and pesticides at control rates to check exploitation by the private companies.

In sum, both centre and state governments should jointly vow to chalk out a plan to heel the fractured agriculture economy by devising a permanent solution to pull the Indian farming community out this dark well of debt. Only sincere political will and economic policy makers’ practical approach will help reach the goal of creating an environment for sustainable agriculture.  

The end