Why are Punjab farmers unhappy despite loan waiver, cash in hand

The issue of farm distress needs to be taken up as a long-term project and should not be looked through the prism of small-term electoral gains

By Rajeev Khanna
Published: Thursday 07 March 2019
Representational Photo: Aparna Pallavi/CSE
Representational Photo: Aparna Pallavi/CSE Representational Photo: Aparna Pallavi/CSE

Farm distress and farmer unrest continues in Punjab unabated. This is despite the Captain Amarinder Singh-led state government claiming to have disbursing loan waivers of Rs 4,736 crore, and Prime Minister Narendra Modi directing the Union government to transfer the first installment of Rs 6,000 annual financial assistance for farmers, as announced in the 2019 interim budget.

The moot question that stands is: why is the unrest continuing despite these interventions. Experts point out that farmers have been cheated in terms of what was promised to them and what is being delivered. They also underline that while debt waivers can be fire-fighting equipment, the factors responsible for the debt trap continue to stand where they were.

Earlier this week, thousands of farmers staged a protest squatting on the railway tracks at Jandiala near Amritsar, badly affecting the rail traffic. The Railways was compelled to cancel 22 trains on March 5, 2019 and 34 on March 6, besides diverting several trains via Tarn Taran and Mukerian railway stations. 

Among their demands was a complete loan waiver, payments for their sugarcane sale dues with 15 per cent interest. The protest was called off on Wednesday evening after the intervention of the Punjab and Haryana High Court. The HC has reportedly asked the farmers to give a charter of demands to the government, and that a status report be filed by March 19, 2019 — the date for next hearing.

“We want a complete loan waiver and not a partial one that is being disbursed. We also want the government to immediately pay the sugarcane dues with 15 per cent interest as has been directed by the High Court in the past when the pendency of payments exceeds 14 days. The government should stop the Kurki (attachment of properties) for farmers unable to repay loans. The banks should not use the blank cheques taken from farmers at the time of giving loans as instruments to harass them,” said Satnam Singh Pannu of Kisan Mazdoor Sangharsh Committee that had organised the protest.

The farmers claim that the various sugar mills owe more than Rs 122 crore to the sugarcane producers since the last season.

Debt trap

Professor Gian Singh who is an expert on agriculture and farmer-related issues said farmers in the state are feeling cheated. “They were promised an entire loan waiver on institutional and non-institutional debt ahead of the elections, but what is being given is a partial amount that does not cover all the farmers. The waiver is being extended to marginal farmers earning up to Rs 2 lakh and small farmers owning small holdings with an income under Rs 2 lakh. If the latter earns even a rupee above Rs 2 lakh he is denied the benefit. This is exclusion,” he said.

Singh highlighted studies which show that except large farmers having land holding of 15 acres and above, the remaining are not even in a position to pay the interest on loans taken. According to him the total farm debt in Punjab is somewhere around Rs 1 lakh crore of which the government is unlikely to waive even 10 per cent.

He further said that farm labourers and artisans are being ignored in the exercise. “While the government claims to be helping theses categories by waiving off loans of Primary Agriculture Co-operative Service Societies, the fact is that majority of these people are not members of co-operatives,” said Singh.

“The farmers on their part are also not clear on what they want. While their demands focus on loan waivers, implementation of recommendations of Swaminathan Commission and payment of sugarcane dues, they should actually be focusing on basics like food, health, education, clean environment and social security,” he added.

Ranjit Singh Ghuman who is an expert in agricultural economics at Centre for Research in Rural and Industrial Development (CRRID) at Chandigarh asserts that while debt waiver can act as a fire extinguisher, the reasons for farm distress continue to stand.

He underlines that the employment avenues for both the cultivator and farm labourer have been shrinking. For those falling in the category of semi-medium farmers and labourers the problem is very serious because they do not have quality education, no proper employment avenues and cannot send their children out to get higher education. With no employment being generated they are unable to get their children to learn any other skill.

“It’s a vicious circle and with the land-man ratio increasing the disguised unemployment is also rising. Various studies show that the lack of higher education is very high among the households in rural Punjab,” he said.

Ghuman added that in almost 70 per cent rural households there are no matriculates and this figure goes up to 90 per cent in case of households of farm labourers.

On the issue of non-payment of sugarcane dues, he said, “This is simply unacceptable. It is a double whammy for the farmers because on one hand they are denied their payments which can be used to meet their various needs, and on the other they are compelled to take loans for which they have to pay interest. The mills continue to earn interest on the payments that they withhold. There is no reason why the farmers’ payments are delayed. It is also a fact that majority of the mill owners enjoy political patronage.”

It was only on March 2, 2019 that the Punjab Cabinet gave ex-post facto approval to disburse Rs 25 per quintal directly in the accounts of sugarcane farmers, out of a total State Agreed Price (SAP) of Rs 310, with the remaining Rs 285 per quintal to be paid to them by private sugar mills for crushing year 2018-19. 

“The move is aimed at ensuring economic viability of the mills and timely cane payment to the farmers for the crushing season 2018-19, and is a follow-up of the decision taken in this regard at a meeting held under the chairmanship of the chief minister on December 5, 2018,” said a government spokesperson.

Experts add that the issue of farm distress needs to be taken up as a long-term project and should not be looked through the prism of small-term electoral gains.

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