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Gist of Editorials: Lifelines Beyond Farm Loan Waivers (The Hindu) | GS – III

A farm loan waiver was among the first steps taken by the three new governments in Rajasthan, Madhya Pradesh and Chhattisgarh, and has understandably set off a debate about its usefulness.

Relevance : GS Paper III (Indian Economy)

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  • There have been continuous farmer agitations recently which display the rural agrarian distress.
  • A farm loan waiver was among the first steps taken by the three new State governments. Since 2014, many states have taken similar moves.
  • The need of loan waivers
    • The mounting debt burden is pushing farmers to despair and suicides.
    • More than 50% of farming households are indebted, with rates as high as 89-92% in some States.
  • Major reasons for farm debt
    • lack of compensation during drought and disasters
    • failures of the crop insurance scheme
    • deficit due to prices falling below the MSP
  • Questions that loan waivers raise
    • Will its benefit reaches small and marginal cultivators?
    • Will the same situation not replayed again?
  • Repeated loan waivers are not in the interest of farmers. Immediate relief should be accompanied by a long-term systemic solution to indebtedness.
  • Long term solutions
    • Institutional credit system which is accessible to all cultivators..
    • Registration of all cultivators and providing them Kisan credit cards.
    • Need of protection from debt trap in bad years.
    • Establishment of farmers’ distress and disaster relief commissions.
    • limited liability and bankruptcy protection for farming sector.
    • Agriculture should be made profitable.
  • The farming community is not likely to relent if governments adopt a business-as-usual approach.

 

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