Centre, states to discuss farm distress

Centre, states to discuss farm distress: NITI Aayog to hold meeting on Monday; central assistance likely to keep farm woes away...

Farm loan waiver
This refers to the report “Centre, states to discuss farm distress” by Arup Roychoudhury &Sandeep Mukherjee (July 9). This ‘season’, there is a refreshing new approach to handling the sporadic farm loan waivers by state governments and Centre has been consistent in giving out clear signals about the need to manage the fall
out of meeting election promises by those who made the commitments, in the first place.
For decades, Centre and states have been going ahead with irrational waivers of farm loans, in total disregard to the pleas made by Reserve Bank of India to insulate such waivers from negative impact the action can inflict on the financial system. Such wholesale waivers in addition to affecting the recovery climate, discourage willing farmers from increasing efficiency in farming, improving productivity by accepting modern practices and saving for future when the going is good.
Perhaps, the time is opportune to revisit the old three component (A- Farming costs+ B- Inputs or ‘Kind’ component + C- Consumption component) formula for agricultural financing by adding a fourth component, namely ‘Insurance’ or saving from current income for meeting future unexpected losses. While the discussions being initiated on
Monday, July 10 by NITI Ayog will concentrate on finding immediate fire fighting/first aid solutions in the context of waivers already announced and
those in the pipeline, long term solution to the problem will lie in making farming an economically viable activity by ensuring provision of rationally priced inputs and a farm gate price which factors in all reasonable costs involved.
The deficiency need to be subsidized and cost of such subsidy will be much less than that incurred now for politically colored waivers.
M G Warrier, Mumbai


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