Loan waivers don’t help 80% small, marginal farmers

The farmers march to Delhi in December and their demand that the Parliament hold a special session to address their concerns is a stark reminder for the country not to forget its agrarian community reeling under multiple blows.

Apart from setting up commissions, no serious efforts have been made to find solutions for major structural problems like fluctuations in markets that are controlled by middlemen, declining yield, lack of storage facilities and lack of alternative sources of income.

Nearly 15 years after the M S Swaminathan committee submitted its recommendations, successive governments have failed to implement them in their true spirit. The formula for minimum support price (MSP), which is 1.5 times the cost of cultivation, has been muddled as the ruling elite has found ways to avoid the actual costs, including labour and land rent.

To save farmers from middlemen, the Karnataka Agricultural Price Commission has recommended the state government to amend rules for implementing statutory minimum purchase price at  Agricultural Produce Market Committees (APMC) based on the MSP announced by the Centre.

The commission has also developed a software for real-time information on trade at APMCs, which will enable the government to decide on announcing the MSPs based on the quantum of produce that arrives at the market. Six months after getting access to data, the government has not made a move to iron out the issues.

Experts have repeatedly pointed out that farm loan waivers, touted as achievements by the political classes, do not help about 80% of the small and marginal farmers who have little access to formal loans. As a matter of pride and part of vote bank politics, loan waivers have been used to silence opposition and activists alike.

On the other hand, the waivers have hurt the banks, which have become overcautious in extending loans to agriculture sector. Banks are struggling to meet priority sector lending targets set at 18% of the net bank credit.

The Union government has now taken up studies on doubling of farmers’ income by 2022, an unrealistic target considering low investment in the agriculture and rural sector. The latest budget cuts further on the allocation to Mahatma Gandhi Rural Employment Guarantee Scheme. This despite the fact that last year’s allocation had been exhausted three months before the end of the financial year, which had nearly halted the entire programme.

Pradhan Mantri Fasal Bima Yojana, the crop insurance scheme, needs to be streamlined as insurance companies had raised objections to claims by 3.5 lakh beneficiaries in Karnataka in 2016-17. While the number of such cases had come down last year, officials in the state government said problems with wrong entry of details of farmers are yet to be addressed.

At a larger level, experts have noted that crop monitoring, diversification, multi-crop farming and technological interventions are some of the urgent measures needed to help farmers in distress.

Chemical fertilisers and genetically modified seeds have affected productivity of lakhs of hectares of farmland. While traditional and organic farming methods have not been forgotten, the pressure of growing commercial crops has eroded their knowledge base. 

Governments have made no efforts to end the monopoly of corporate companies on seed production and distribution, which has essentially led to higher input costs. Proactive measures backed by well-funded policies are required for rebooting the traditional seed culture.

Most of these schemes, however, may not benefit the small and marginal landholders (owning less than 2.49 acre land), who constitute 61% of total farmers in the country. Landless farm labourers, whose number has been increasing over the last three decades, are yet to come into picture.

Higher allocation is needed for schemes and incentives that help create alternative sources of income. This would, in turn, help the marginal farmers to invest only a part of their time in agriculture and diversify into different fields for income security.

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Loan waivers don’t help 80% small, marginal farmers

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