The budgetary provision for farmers’ loan waiver, it seems, was announced without realising the farmers’ plight. Dividing farmers’ fraternity as small, marginal and big should not be based on the quantum of land, as it is actually based on the quality of soil, nature of the 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 the amount of land. The loan waiver based on quantum of land holding is therefore deceptive and needs urgent correction in the larger interests of the farm sector.

While the Union finance minister P Chidambaram has not yet realised this, it seems both the Congress chief Sonia Gandhi and general secretary Rahul Gandhi have realised the same and the need to modify the scheme by extending the limitation of two hectares. If the relief is to be given it should be on the basis of quantum of loan up to which it should be waived instead of quantum of land.

Right criterion

This criterion was righty followed at the time of the last budget wherein the interest consession of seven per cent was given to all agricultural loans up to Rs 3 lakh. This rational and factual criterion should have been followed in this budget also and the same limit of Rs 3 lakhs or more should have been fixed for the loan waiver. If all farmers’ loans up to Rs 3 lakhs are written off, the farm sector would get an instant relief.

Has Congress failed to enlighten its own finance minister? This question is now raised because even after the announcement of loan waiver the Congress leaders in the party and government are openly disclosing the inadequacy of the scheme. Post-budget incidents of farmer suicides in various parts of the country are also proving the point.

The demand to increase the quantum of land holding for loan waiver from two hectares to five and more is voiced by the Congress-ruled states’ ministers. In fact the Congress MPs should have intimated the finance minister about the realities in the agricultural sector before the budget, as the MPs are aware of the fact that land holding alone is not the criterion of small or affected farmer and while deciding the relief package, the quantum should be more than two hectares if considerable number of farmers are to receive the benefit.

When the loan waiver scheme was announced, most of the Congress leaders and state chief ministers of Congress-ruled states had openly expressed the urgent need to increase the limit of land holiding.

NABARD definition

This is because if the criterion for eligibility of concessions is fixed to be two hectares, a considerable number of farmers who are having more than two hectares or five acres of land but who are distressed because of minimum crop production and low prices for agricultural produce, which is not based on cost of production, are kept out of the purview of eligibility of getting any relief.

If the National Bank for Agriculture and Rural Development (NABARD) has already considered the definition of small farmers there is no reason why the finance minister should not abide by it for loan waiver scheme.

In response to the demand to modify the condition for the loan waiver, the finance minister should have raised the issue in the Union cabinet meeting which sanctioned the amount required for the waiver scheme. Perhaps he was not informed by the Congress party members about the due demand or the Congress high command might have failed to issue necessary directives about the modification.

Howevever it is time to urgently take a final decision on the issue by modifying the condition by increasing the quantum of land holding for loan waiver. After all, farmers’ plight is bound to be a very vital issue in coming elections as farmers form a sizable majority of voters in the country.