Can Loan Waiver Put An End To Farmers’ Miseries? 

Mahesh Vijapurkar

Insisting that farm loan waivers did not make economic sense either to the state or the farmers who need long term solutions, Maharashtra chief minister, Devendra Fadnavis has now agreed to it, but with conditions.

It has not been an easy decision for the Fadnavis government with a debt burden of Rs3.71 lakh crore is not going to find it easy to finance this waiver which would cost Rs30,000 crore, and several welfare schemes which are also aimed at the rural areas would need to be trimmed.

For the waiver to be actualized, mere signals to the banks to start lending to the hitherto indebted farmers would not do. The state government would be actually required to make good the money to them to balance their books. The fact that corporates get their loans rescheduled at will from commercial banks has provided the moral basis for the farmers’s demand.

What Devendra Fadnavis has managed, however, is by taking the Opposition out of the game of demands and protests, though the other political parties claim they were supportive of the farmers, and not instigating them. That the coalition partners, the Shiv Sena was with the farmers made things uneasy for the BJP.

An interesting aspect of the farmers’ “strike” has been its timing. The season for the next crop cycle was yet to start but quite imminent, tied up with the arrival of the monsoon. Many had prepared their lands for sowing, and had little activity on hand, freeing them to take to demonstrations.

It is a fact that the farmers would not have continued with the strike longer because the entire farm cycle was ahead, and the strike had the visible involvement of those who grew fruits and vegetables.

Major cities beat this diminished flow to wholesale markets by looking to other states, especially Gujarat for supplies.

There are two conditions that apply: One, it would be restricted to all the small farmers, that is with holdings of up to five acres; and two, the other farmers who have larger land swaths would have to wait for a while, at least a month and more, to see how they too could benefit.

For the second, a panel of ministers and farmers would study the waivers in other states, and come up with a formula. Not all of them would get their slates clean, because it is likely that those who have incomes from other sources – business, employment, etc. – may have to sit out.

The farmers had been aggressive, and even divided, because on section continues to root for a blanket waiver for all of them, the size of the plots they own notwithstanding. However, the farmers who benefit are not a small number: about 80 percent come in the five-acre owning category.

Though there is rejoicing in general, the state government has withheld all the details of the scheme even for the small farmers, though the indications are that it may not be above Rs1,00,000 per farmer, thus restricting the impact on the exchequer. This likely condition is yet to sink in among the potential beneficiaries.

Even at that restricted waiver, which frees farmers from immediate burdens to enable them to start their farming operations, the relief is of consequence because farming has not been remunerative, and the key solution – proper support prices, storage and cold chains – has not been forthcoming over decade.

It is with those support in terms of both prices and infrastructure that one could expect the farmers to desist from committing suicides. In the past one decade, about 18,000 have either hung themselves or consumed poison to take themselves personally out of the immediate woes, but left their families high and dry.