What’s your take on the incidents of farmers’ suicides due to debt burden that have become a political issue across the country?
I believe it’s wrong to say that debt is the only reason driving farmers to take the extreme step. But yes, it’s an important factor in the overall distress situation caused by other contributing factors such as personal family reasons and diversion of loans for non-productive spending. The issue looks more of media projection. I doubt a farmer with loan liability of Rs 2 lakh and still being owner of land can take his own life. At least Punjab’s farmers are not that weak. By the way, has anybody bothered to study and report non-farmers also committing suicide?
You said that debt is one of the important factors when it comes to committing suicide. What preventive measures would you suggest?
The answer to this lies in taking correct policy initiatives. During the pre-partition days of the Unionist government, Sir Chhotu Ram, who himself was a Jat, successfully implemented bailout programme for farmers straining under debt from the private money lenders. Under this, the debt of all those farmers, who had already paid interest equal to amount of loan taken by them, was waived.
Do you mean debt waiver could be the answer in the present situation?
No, it’s wrong. It’s illogical and politically motivated because of the way it’s being promised with an eye on votes. One may ask as to what’s the fault of those who have repaid loans and why should those who can repay shouldn’t do so. We tend to ignore the basic fact that the loan is against an individual and not the agriculture sector. Study circumstances of the individual, deal with the individual to provide relief instead of waiver.
What concrete suggestion would you like to make?
I had recommended in my report to the RBI that we should drop provision of collateral security from farmers owning land up to five acre and his house. Moreover, under the policy correction easier supply of loans by banks and other financial institutions should be checked as liberal supply of funds tends to get used up for unviable purposes. Loan targets set by the government from the side of funds supply is wrong. Unfortunately, every scheme in our country is target-oriented supply side. This is the basic reason behind non-repayment of loans and burgeoning NPAs as well.
What’s your view on implementation of the recommendations made in the Swaminathan Commission report to bail out farmers?
My observation is that the panel headed by him either had no economist or if it had one, he didn’t know about economics.
What makes you say so?
The recommendation of 50 per cent increase in price of produce over cost is not workable because higher price is not solution of low-income problem. The price is national level subject. About 25 percent farmers at national level don’t have marketable surplus as they produce even less than 10 quintals. They sell their produce under stress. The only gainers from this recommendation could be already rich farmers with large land holdings having marketable surplus.
Then what should be done to alleviate marginal and small farmers, who constitute over 70 per cent of the farming community in the country, reeling under distress?
The best course for their long-term alleviation is to wean them away from the agriculture as the only occupation. Make them part-time farmers by providing them off-farm opportunities to earn. Since Green Revolution, the production in the country has almost reached a saturation point. It’s already late but the entire agriculture scenario needs a relook to take it to the higher level.
What should be the course of action in the present scenario?
I have for long been advocating massive diversification wherever production has reached a plateau. For instance, I strongly believe Punjab should be a vegetable producing and a dairy state. The rice cultivation is the biggest guzzler of the underground water here, which is seriously affecting environment. It should be minimised here but increased in other deficit states. But in absence of assured market for alternative crops, farmers tend to stick to rice cultivation because it gets them assured monetary return.
Can value addition in terms of food-processing facilities help?
We must not lose sight of the fact that the agriculture can succeed only when you proceed from market back to crop production. In other words, let the market decide what to grow. The same holds for adding value to produce. We have to go backwards to the farmer’s field, provide him inputs like seeds, technology and then link it to market. The Maharashtra model of linking sugarcane cultivation to factories is a case in point.
Why were your reports on diversification to Punjab government in past not considered worthy of implementation?
There’s disconnect between experts and policy makers. Unfortunately, the experts’ opinions in our country are limited to papers and converted into effective policies. I had submitted two reports in 1986 and 2006 to the state governments with focus on 50 years ahead. The reports drew appreciation from the Centre and World Bank but ignored at the state level. I was made Vice-Chairman of the State’s Planning Board in 2002 with Cabinet Minister rank. I finally resigned after four years, saying ‘I am not relevant to system of your governance’. However, I was persuaded to continue with the promise to discuss my report in the next Cabinet meeting but it never happened.
What should be the starting point of solution of the current distress?
If roof of a house is leaking, the floor can’t remain clean. Nothing will happen whatever solution one may suggest until the corrupt remain in power and run the system. As it is, democracy is a great instrument of governance but the tragedy is that it is being increasingly undermined primarily by the corrupt practices in system of fighting elections.