Despite farmer marches, Centre plans no debt waiver

Such waivers may impact the credit culture of a State, says junior argiculture minister Parshottam Rupala 

By Rejimon Kuttappan
Published: Thursday 13 December 2018
Credit: Vikas Choudhary
Credit: Vikas Choudhary Credit: Vikas Choudhary

This year in March, thousands of farmers from Nashik marched to Mumbai. In September and October thousands more marched to Delhi. And in the November march to Delhi, there were more than 200,000 people.

All they wanted was a one-time unconditional loan waiver, increased minimum support price (MSP) and a special session of Parliament dedicated to discussion around the agrarian distress. However, it seems their slogans have fallen on deaf ears.

In a written reply on December 11 to Bhavana Pundlikrao Gawali Patil, a Lok Sabha member who represents Yavatmal-Washim, Parshottam Rupala, minister of state in the Ministry of Agriculture and Farmers Welfare, says that there is no plan to waive off the farmers’ loan. The written reply reads that “the Union Government at present is not considering any loan waiver scheme for farmers”.

“Such waivers may impact the credit culture of a State by incentivising the defaulters even if they are in a position to repay the loan and thus create/amplify the moral hazard by discouraging those borrowers who have been regular in repaying their loans,” it says.

It also adds that each waiver granted makes it even more difficult to reject any similar demand in future.

Responding to the government’s move, Rajagopal PV, a Gandhian activist and the president and founding member of Ekta Parishad, says: “Around 35 per cent of the rural population is involved in farming. They are struggling due to setbacks from climate change and lack of better MSP. At this time, if a government says that they are not going to waive off the loans to save the farmers, then it’s quite disappointing.”

As per 2011 Census report, the total farmers population in India is 118.7 million and there are 144.3 million agricultural workers/labourers, accounting for 31.55 per cent of the rural population.

“It seems that the central government has different priorities. We don’t want temples. We want support for farmers,” says Rajagopal, who has played a vital role in all farmers' marches. He added that they will intensify their protests to demand loan waivers, better MSP, better land reform policies and implementation of the Swaminathan commission report to overcome the agrarian crisis.

The Swaminathan commission had recommended that the MSP be set at 1.5 times the comprehensive cost (C2). To simplify the terms — A2 costs basically cover all paid-out expenses, both in cash and in kind, incurred by farmers on seeds, fertilisers, chemicals, hired labour, fuel, irrigation, etc; A2+FL costs cover actual paid-out costs plus an imputed value of unpaid family labour; while C2 costs are more comprehensive, accounting for the rentals and interest forgone on owned land and fixed capital assets respectively, on top of A2+FL.

The Modi government decided to set MSP at 1.5 times A2FL, which is substantially lower than C2. The MSP for most crops was already higher than 1.5 times A2+FL when the government made the announcement. Since then, another demand from farmers relating to the MSP has propped up—a constitutional guarantee that crops will not be sold at less than MSP.

Meanwhile, the agrarian crisis has pushed farmers to commit suicide. As per the National Crime Records Bureau (NCRB) data, between 1995 and 2016, 3,33,398 farmers committed suicide. The data shows that over 15,000 suicides take place every year, 1,200 suicides each month and 42 suicides per day.

In 2015, according to NCRB statistics, 8,007 farmers and 4,595 agricultural labourers have committed suicides, accounting for 9.4 per cent of the total suicide victims (1,33,623) in the country. Out of 8,007 farmer suicides, a total of 7,566 were men and 441 were women. 

The report adds that during 2015, major causes of suicides among male farmers/cultivators were reported as ‘Bankruptcy or Indebtedness’ accounting for 2,978 suicides that year, followed by ‘Farming Related Issues’ accounting for 1,494 suicides—that is 39.4 per cent and 19.7 per cent of total male farmer suicides respectively.

And if we see the state-wise breakup, majority of suicides committed by farmers were reported in Maharashtra—3,030, followed by 1,358 suicides in Telangana and 1,197 suicides in Karnataka, accounting for 37.8 per cent, 17.0 per cent and 14.9 per cent of total such suicides in 2015.

The document presented in Parliament also reveals that as per the ‘Situation Assessment Survey of Agricultural Households’ conducted by National Sample Survey Office (NSSO) in 2013, the average monthly income per agricultural household from all sources is estimated to be Rs 6,426. Interestingly, NSSO has not conducted any such survey since 2013 and the government doesn’t have comparable estimates for rise in income of farmers between 2014 and 2018.

Rajagopal says that the current government lost the assembly elections only because they forgot the farmers. “If they continue to ignore the farmers then they are going to lose the 2019 elections as well,” Rajagopal adds.

Subscribe to Daily Newsletter :
Related Stories

Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.