The farm loan waiver is the least the government can do to begin the process of healing the farm sector. The current agrarian crisis has not been created because farmers shirk work or cannot manage farms. The crisis is the result of insensitive and exploitative policies crafted by successive generations of bureaucrats and politicians in this country.
That farmers continue to produce food under the austere and adverse conditions that we have created for them is nothing short of a miracle.
Post waiver, rectifications have been proposed which should be acted upon to better focus this relief and undoubtedly this will happen when Parliamentary Standing Committees meet to discuss the budget. There is for instance, recognition of the fact that a blanket
limit of 2 hectare land holding to qualify for relief would not be fair. Larger land holdings in rain fed areas should be entitled for relief since productivity is much lower under rainfed conditions compared to irrigated areas. Two hectare in Punjab is not the same as two hectare in Jharkhand.
The other issue is how to help the large numbers of farmers who are indebted to private moneylenders. Kerala has developed a model by setting up a Farmer Debt Relief Commission with powers to find solutions that can be implemented. This kind of exercise would best be undertaken at the state level. State Agriculture Departments, Agriculture Universities, Panchayati Raj Institutions (PRI), and NGOs should be brought together to help identify indebted farmers. The debt with private moneylenders should be negotiated and a compromise formula worked out to make a final settlement.
But the key concern, as the process of providing debt relief gets underway, will be to monitor the allocation of funds. Great vigilance needs to be exercised to ensure that the write offs are not being exploited by fat cat farmers growing grapes and sugar in Maharashtra ! A monitoring and oversight committee of citizens, with a sentinel function should be set up immediately to watch where the money of the loan waiver is going. Keeping in mind the high levels of corruption and the routine siphoning off of government funds by people who were never intended to be beneficiaries, there must be a tremendous effort to ensure that the 'business as usual' method of functioning does not pour the waiver into illegitimate pockets. One of the best monitoring mechanisms is transparency. All banks should be required to publish in the local newspapers and national dailies, details of the farmers whose loans are being written off.
Careful intervention and proper guidance is crucial at this time to ensure that loans are used to increase productivity and the cycle of debt is not repeated. Farmers should be given easy access to critical agriculture inputs needed for productive agriculture.
These could be good quality seed, fertilizer and pesticide. The new loans can be used to create water bodies to provide irrigation for a second crop in single crop rainfed areas. Where appropriate, the new credit can be used to acquire livestock or develop poultry or fisheries for additional off farm incomes. The crux is that the debt relief must be guided in a way that the farmer is enabled to become productive again. If this can be made to happen, this investment in agriculture will alleviate the agrarian distress and lead to increase in food production and a more assured basis for the country's food security and sovereignty.