Return of farm populism
Return of farm populism: Loan waivers are not the answer to the numerous issues plaguing agriculture...
Mainstream farm sector
This refers to your editorial “Return of farm populism” ( Business Line, March 28). The observation “Loan waivers are not the answer to the numerous issues plaguing agriculture” should be painted in block letters on the walls of all legislatures, finance and agriculture ministries of central and state governments, banks, RBI and NABARD.
After the assets with religious and non-government institutions, farm sector resources are the worst managed national assets awaiting mainstreaming in India. Agriculture not being in the central list, the funds in the farm sector largely being managed by cooperatives which are in the ‘concurrent list’ and farm workers managed by big affluent farmers being a strong constituent of ‘Vote Bank’ and fund-raisers for political parties have contributed to perennial neglect of the sector for being brought under normal regulatory/legislative controls of government.
The above situation has made regulatory and supervisory bodies like Reserve Bank of India and NABARD to remain mere spectators when governments and financial institutions fall in line with the wishes of political leadership at various levels.
The advisories like the recent one from Centre against farm loan waivers and taking a lenient view of such waivers by state governments or going slow on providing support to financial sector in recovery of farm loans need to be seen in the above broader context. Election Manifestoes are not vetted for the legal enforceability or resources linkages relating to the promises included. But, when a party comes to power, the popular promises are taken up for implementation without weighing the pros and cons or allowing the legislatures to deliberate on the basic issue “who will foot the bill?”. Sometimes, even the formality of consultations with stakeholders is skipped.
At this stage, Centre should consider consultations with states on measures to professionalize and mainstream farm sector to make the sector participate in the economic development of the country effectively. Changes in approach may be necessary on issues like:
(a) Tax on agricultural income
(b) Modernizing methods of cultivation
(c) Linking farming to a national ‘food budget’ export potential and cheaper imports.
(d) Re-skilling of workforce in farm sector and
(e) Optimum utilization of farm lands.
(f) Substitution of ‘waivers’ by subsidies which will incentivize further involvement of farmers in increasing production. Multiple subsidies like ‘interest subsidy’ for prompt repayment from various sources, which may not result in increased farm productivity, but will transfer the burden to the taxpayer should be avoided.
In all the above efforts financial institutions and banks should be given their rightful role and their concerns should be addressed.
M G Warrier, Mumbai