Mr Modi is right: On Politics of Loan Waiver
January 2, 2019
Politics of loan waiver
This refers to your
editorial “Mr Modi is right” (Business Standard, January 2). Perhaps, agricultural loan waiver
became part of Indian political maneuvering in its present form during late
1980’s resulting in a massive loan waiver through the Agricultural and Rural
Debt Relief Scheme,1990 (ARDRS, 1990). The timely caution from RBI about the
damage such blanket waivers of loans can cause to the repayment ethics, despite
governments shouldering the responsibility to repay, and thereby to the financial
system by generating future hopes of similar waivers, fell on deaf ears.
All political parties
are party to the ‘Farm Politics’, as none of them has so far raised the issues
now highlighted by the Prime Minister openly, like, the benefits of investing ‘waiver
funds’ in infrastructure and input support for farming. Another politically
sensitive issue is tax on agricultural income. If agricultural income is taxed rationally,
the revenue will part-fund infrastructure and insurance in the same sector.
A recent media report about farmers in the drought-affected Hiware Bazar
village in Maharashtra shows, a different approach to farm sector is possible.
The farmers in this village have stated that they are not interested in the
government’s loan waiver, but have resolved to develop their own marketing
model this year (2019) to increase profits.
Even as the Centre mulls over how to help farmers and achieve its
ambitious target of doubling their income, these farmers have shown the way by
multiplying their income by conserving every drop of water and making
agriculture a profit-making venture. The average monthly income of the farmer
in this village has reportedly increased from ₹832 in 1991 to ₹32,000 today.
The same model may not be replicable elsewhere. But the principles and
approaches to resources mobilization and project management are universal. As a
first step, NITI Ayog could consider arranging to disseminate this success
story through media and government channels. Perhaps, Prime Minister may
consider including this in his ‘Mann Ki Baat’, if not already done.
M G Warrier, Mumbai
New Year resolution: No farm-loan waiver, please*
Radheshyam
Jadhav Updated on December 31, 2018
Farmers in Hiware Bazar village decide to do away with middlemen instead
2019 might be another farm-loan waiver year, but farmers in
drought-
2019 might be another farm-loan waiver year, but farmers in
drought-affected Hiware Bazar village in Maharashtra, have a different plan in
mind. They are not interested in the government’s loan waiver, but have
resolved to develop their own marketing model this year to increase profits.
Even as the Centre mulls over how to help farmers and achieve its
ambitious target of doubling their income, farmers here have shown the way by
multiplying their income by conserving every drop of water and making
agriculture a profit-making venture. The average monthly income of the farmer
here has increased from ₹832 in 1991 to ₹32,000 today.
“Loan waivers will not help. We don’t want them. Instead, the government
must empower farmers and make them less dependent on loan waivers. It is a
proven fact that loan waivers don’t help farmers sustain and survive. We just
need pure seeds, electricity and a fair
price for our produce,” a farmer and village deputy sarpanch
Popatrao Pawar told BusinessLine.
Like Pawar, many farmes here believe their fate is in their
own hands. “The village has a tradition of holding a meeting on December 31
every year to review water availability and decide the cropping pattern. We
have a water budget every year and if there is a water deficit, farmers take a
collective break from farming. But this does not affect their earnings as the
dairy business earns enough money,” said Pawar.
Marketing network plan
This year, farmers resolved that they would develop their own
marketing network to sell their produce and keep away middlemen. “The middleman
system is getting stronger and earning without doing any work. We are finding a
solution. This is our New Year’s resolution,” said Pawar.
Hiware Bazar, located
in an arid zone of Maharashtra in Ahmednagar district, gets 200-300 mm
rainfall. Twenty-five years ago, villagers launched water conservation and
watershed management works. They ensured that not a single drop of rainwater
was wasted.
They changed the cropping pattern and also stopped growing water guzzling
sugarcane, instead opting for vegetables, pulses, flowers and fruit cultivation.
Village farmers have a strong dairy business and about 4000 litres of
milk is produced daily. Because of profit-making no family in the village is
living below the poverty line. In last 25 years, Hiware Bazar has not called
for a water tanker and families that had left the village in search of a
livelihood have returned back. Not surprisingly groundwater is available at
just 20-40 ft in Hiware Bazar while surrounding villages have to dig 300-400
ft.
*Report in The Hindu Business Line, January 1,
2019
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