New Delhi: With the agrarian crisis enveloping almost all of India, election statistics indicate that loan waivers have become the winning-mantra for state elections. In the last two years, every party that has promised farm loan waivers has gone on to win elections.
However, MS Swaminathan, father of the Green Revolution, considers the tactic economically non-viable and has urged politicians not to use it just for electoral gains.
"The agrarian crisis is an economic crisis. The monsoon and the market are two major determinants of the viability of small farmers. Political leaders should not promote economically non-viable policy just for electoral gains," he said in a conversation with News18.
After the newly formed Congress governments in Madhya Pradesh and Chhattisgarh waived off farm loans, the Ashok Gehlot-led Rajasthan government followed suit and waived off loans of up to Rs 2 lakh taken till November 2018, fulfilling Congress chief Rahul Gandhi’s poll promise to write off loans within 10 days of coming to power.
Chief Minister Ashok Gehlot tweeted that the loan waiver would cost the exchequer Rs 18,000 crore. Last week, Madhya Pradesh Chief Minister Kamal Nath had cleared the proposal to waive farm loans up to Rs 2 lakh, his first act as CM. The waiver is estimated to burden the state by Rs 35,000 to Rs 38,000 crore, benefiting around 34 lakh farmers in the state.
The same day, Chhattisgarh CM Bhupesh Baghel, too, announced a waiver of short-term agriculture loans to the tune of over Rs 6,100 crore for more than 16.65 lakh farmers.
While populist measures are meant to win favour and sentiment among the large voter base of farmers, they are also a stress on state economy. In the three states that recently voted in Congress governments, the total cost of waivers is estimated to be between Rs 59,100 crore to Rs 62,100 crore.
Speaking on the same, Swaminathan said loan waivers should not become a part of the agriculture policy. "Loan waiver can be practised occasionally under circumstances where farmers find it difficult to repay the loan. It should not, however, become part of an agriculture policy since the highest priority in agriculture policy should go to making agriculture economically viable and profitable," he added.
Swaminathan, who had headed the national commission for farmers, happens to be one of the few non-political faces who enjoys great popularity in the hinterland. As lakhs of farmers descended on Delhi throughout 2018 to protest against the rising difficulties in farming, all of them had one demand in common: implementation of the MS Swaminathan report.
The report concludes that every farmer must get minimum support price (MSP) for his crop which needs to be calculated by the "C2+50%" formula. This roughly translates into 1.5 times the cost of input.
Further elaborating on the need and parameters around MSP, he said, "MSP will be effective only if there is a procurement policy. There has been an integrated policy for pricing, procurement and public distribution. If there is not adequate procurement, MSP may not be provided in commercial transaction. Therefore, we should have an integrated policy for pricing and procurement."
With 2019 general elections approaching, political parties will be going all out to appease farmers, who happen to be a large vote bank. The recent win for Congress in three states is also being seen as farmers coming together as a political constituency.
"The way ahead is to ensure that agriculture remains both economically viable and profitable. We have an opportunity now to put in place policies which improve the economic status of farmers and at the same time make farming and attractive occupation for the younger generation," said Swaminathan.