With the Lok Sabha elections looming over the head of the incumbent government like a sword, the promises it has made to the farmers of its nation are anticipating the test of time.
The government has time and again thrown loan waiver promises as a band-aid on the festering wounds of the aggrieved farmers, and used it to their own profit to fill up the vote banks. Since 2017, as many as eight State governments have promised to waive-off the farm loans of over 1,90,000 crores. According to the Reserve Bank of India’s (RBI) data on Sectoral Deployment of Bank Credit, agricultural Non-Performing Asset (NPA) ratio shot up to 8.6% of the total banking default and as of October 2018, 1.6 Lakh Crores have been lent to the agricultural sector, out of which 16% has been written off.
It is pertinent to see the depth of the agrarian crisis through the eyes of the small and marginal farmers who are affected the most by these intransigent policy decisions. Unfavorable weather condition, corrupt marketing practices by the middlemen and crashing prices of produce adds to the woe, webbing them into a vicious cycle of debt and repayment.
According to P. Sainath, a rural Journalist, around ninety-percent of the small and marginal farmers take high-interest loans from the private money lenders. In that case, these big farm loan waivers have proven to be inefficient as they do not reach the beneficiaries and adds burden on the public exchequer. Those who lend it from the banks become wilful defaulters as they wait for the government to pay off their loans in the next round of elections. Eventually, fruits of this populist move are pocketed by ineligible big farmers. When the impervious farmers find no way to pay back the loan, they resort to suicide, whose data is not available, as National Crime Records Bureau (NCRB) has not released the suicide data from the last three years.
As rightly stated in the research paper of RBI published in 2017, loan waivers add to the fiscal burden as they take away the money from taxpayers and put it in borrowers’ hands. This is followed by an endless cycle of dip and rise in agricultural Non Performing Assets (NPAs), thereby affecting credit culture and leading to farmers taking intervention by the government for granted.
“This move will only save them from the backlash. ‘Jai Jawan, Jai Kisan’ slogan needs to be revisited by the government. They should take notes from Kerala State Farmers’ Debt Relief Commission, which, rather than focusing on bulk loan waiver, go from village-to-village to extradite information on exactly how much relief a farmer needs,” said Manu Krishnan, a researcher at Tamil Nadu Agricultural University (TNAU).
The eligibility criteria for availing the loan waiver often excludes those in dire need of it and this is exactly where we require an intervention. Loan waiver is given to the person on whose name the land deed is registered, and more often than not, women are shunned from this and hence they become ineligible for the compensation. Similarly, as per the data of the National Sample Survey Office (NSSO), agricultural laborers which constitute fifty-five percent of the total population involved in agricultural activities, are not treated at par with the farmers and hence are not duly compensated.
At a time when farmers are more on the streets than in their fields, merely setting out policies and throwing analytical reports their way is not going to help them. In order to implement the policies, several challenges would have to be looked in the eye. Data never lies, and even though the government has done a lot to aid the farmers, policies framed by them are still foggy and short-sighted.
To identify the distressed farmers, rather than waiving the loans in bulk, Central and State government should firstly weed out the wilful defaulters or anyone who is not eligible for the compensation. Rather than crying over spilled milk, immediate weather based assistance can be provided, bottlenecks can be effectively removed to make farm sector more Foreign Direct Investment (FDI) friendly and markets can be duly regulated. With public and private sector’s interventions, the plight of our ‘anndattas’ can surely be solved, so that their rights to a dignified life is not infringed.