O J’s Corner

Farmers need more help;
but why are we cribbing
about Rs 60,000-crore dole?

All right, the farmers would be better off if we provide them adequate loans at, say four per cent interest. If there is crop failure owing to various reasons, his loan should be rescheduled. There should be a permanent price support system.Crop insurance is a must. Lack of adequate water or irrigation facilities, poor infrastructure, inadequate storage facilities, non-remunerative prices are all adding to his woes.

Do all these factors add up to our challenging the Rs 60,000 loan-waiver farm package announced by the Central Government?
In fact, we should stop grumbling and start taking measures to somehow fetch the money and hand it over to the farmers concerned. It is a budget announcement. We can legitimately claim the amount. The State governments, numerous agencies working in the government and non-government sectors functioning in the society should assist the farmers in all ways to secure the benefit. A majority of the farmers may not be able to comprehend the terms and conditions being preferred by banks which had extended farm loan facility. Social activists, the bank employees, agricultural officers, and others concerned with farm operations one way or other should see to it that the poor farmers are the actual beneficiaries. Bureaucratic bungling is there in all spheres. But that should not be allowed to smother the farmers’ rights.

The loan-waiver is applicable to small and marginal farmers to whom advances were made by scheduled commercial banks, regional rural banks and co-operative credit institutions. Agricultural loans disbursed up to March 31, 2007 having outstanding dues as on December 31, 2007 are covered by the waiver scheme.

Those having one to two hectares of land are considered small farmers and those having less than one hectare as marginal farmers. Others who pay up 75 per cent of all outstanding dues on farm loans get a 25 per cent rebate. Three crore small and marginal farmers are expected to get the benefit amounting to Rs 50,000 crore. One crore others would get rebate totaling Rs 10,000 crore.

This mother- of- all loan- waiver packages will have only limited impact on commercial banks, it has been reported. At the end of March 07, the outstanding loan repayments in commercial banks was only Rs 7,3367 crore. In co-operative and regional rural banks, the outstanding dues amounted to Rs 49,000 crore. The entire amount is being wiped out. Earlier, it was expected that the banks and co-operative institutions would be compensated by the government with a mix of cash and bonds. Now it has been made clear that the government would provide cash. Actually, the non-performing assets (NPAs) in the agricultural wing of the banks could be re-written as profits.

One allegation raised against the farmers from ivory towers is that the loan-waiver would make the farmers lazy.Those who find fault with blanket wiping out of the loans should remember that over a period of years, banks of written off lakhs of crores of NPAs in other sectors. Those who have got off with the booty are all influential customers of the banks. In majority of the cases, the banks were not able to move against the defaulters. Considering the largesse extended to other sectors, the present dole given to farmers is peanuts for a grandiose economy like that of the Republic of India.

We should build on this foundation of the government’s gesture to the farming community and extend facilities for permanent settlement of their grievances.