Lending help to farmers with waivers, auction

Punjab CM meets farmers in Chandigarh.
Farming initiative: Capt. Amarinder Singh has appealed to well-to-do farmers to give up power subsidy voluntarily

When Punjab Chief Minister Capt Amarinder Singh tweeted that “In a major step towards farm loan waiver, will give complete waiver for small, marginal farmers (upto 5 acres). This is just the beginning!”, it was clear that Punjab is in the footsteps of Uttar Pradesh and Maharashtra. In the Punjab Assembly the Chief Minister also announced repeal of Section 67-A of the Punjab Cooperative Societies Act, 1961, to end auction (kurki) of farmers’ land. This seems to be a major initiative, perhaps even bigger than the loan waivers.

Already the Adityanath government in Uttar Pradesh has limited itself to crop loan write-offs of not more than 1 lakh, owned by small and marginal farmers. Amid rising demand for loan waivers in several states, the latest announcement in Punjab follows a 36,359 crore farm loan waiver programme announced by the Uttar Pradesh government in April, and 30,000 crore waiver announced by Maharashtra in June following massive protests by farmers. Farmers in states like Haryana and Madhya Pradesh are also demanding loan waivers and implementation of the recommendations of the M.S. Swaminathan commission for fixing crop support prices at 50per cent over the cost of production. Instead of loan waivers and subsidies, the Centre and states can coordinate to implement the Swaminathan Commission recommendation of giving farmers a 50 per cent profit over input costs. A loan waiver offers only temporary relief like bandage. The problem reappears after a few years. More than loan waivers remunerative farm prices can help reduce agrarian distress.

However, as at the Centre, the Modi government promises to double farmers’ income by 2022, the ground reality is entirely different with States faced with farmers’ protests. The latest to hit the headlines are Madhya Pradesh farmers who have dumped vegetables and spilled milk on roads and cut off supplies to cities, including Bhopal and Indore, to express their outrage. . In Madhya Pradesh the Shivraj Singh Chouhan government has promised to extend the MSP benefit to other crops, but this has not calmed down agitated farmers. In Maharashtra the Devendra Fadnavis government, after messing up the farmer agitation, has announced a partial loan waiver. The drought-hit farmers of Tamil Nadu, who had agitated in Delhi for a month and a half, have been pacified with 1,712 crore Central relief against their demand for a 40,000-crore package. In Haryana farmer distress erupted in the form of a reservation agitation, resulting in unprecedented violence.

The Congress government in Punjab, elected on the promise of a complete loan waiver tried a Central bailout even though in March Finance Minister Arun Jaitley had ruled out any Central help for farm loan waivers to states. With the Centre running away from the problem, states are devising their own ways to deal with angry farmers. The Amarinder Singh government had limited options.

The Punjab government has now waived off crop loans of up to 2 lakh taken by small and marginal farmers, a move it said will benefit more than a million farmers. The decision follows an election pledge made by the Congress party to farmers, and similar announcements made by the governments of Uttar Pradesh and Maharashtra. “The initiative would provide double the relief announced by the states of Uttar Pradesh and Maharashtra,” chief minister Amarinder Singh told the state assembly. The government will take overall outstanding institutional crop loans of households where a farmer has committed suicide. The government also said it will raise the compensation to these families from 3 lakh to 5 lakh. For marginal farmers, the state government will provide a flat relief of 2 lakh irrespective of their loan amount. For non-institutional loans, the government said it has set up a cabinet sub-committee to suggest ways to provide relief to farmers after reviewing the Punjab Settlement of Agriculture Indebtedness Act.

Double relief

The decision to write off loans of small and marginal farmers holding up to five acres of land is based on an interim report of a committee headed by T. Haque, former head of the commission for agricultural costs and prices. The waiver of crop loans up to 2 lakh for small and marginal farmers (up to 5 acres) and a flat 2 lakh relief for all other marginal farmers, irrespective of their loan amount, paves the way for a total waiver of agricultural debts. The move would benefit 10.25 lakh farmers of the state’s 18.5 lakh farming families, including 8.75 lakh farmers with land-holding up to 5 acres. “The initiative would provide double the relief announced by Uttar Pradesh and Maharashtra,” Capt Amarinder pointed out.

In case of loans raised from non-institutional sources, the government has decided to review the Punjab Settlement of Agriculture Indebtedness Act to provide relief through debt reconciliation and settlement mutually acceptable to the lender and the borrower. This shall be statutorily binding on both the parties, the lender and the borrower. The CM asked the Speaker to set up a five-member committee to visit families of suicide victims, ascertain the reasons for the suicides and suggest steps to prevent these. He told the Assembly that his government had already decided to repeal Section 67-A of the Punjab Cooperative Societies Act, 1961, to end auction (kurki) of farmers’ land.

Leading by example

The Punjab CM appealed to well-to-do farmers to give up power subsidy voluntarily. To set an example, he announced to give up subsidy on his own farm and appealed to his colleagues to do likewise. Bholath legislator Sukhpal Singh Khera welcomed the proposal urging farmers with reasonable holdings to forego power subsidy so that small and marginal farmers can benefit from this scheme, therefore I offer to forego the power subsidy to all my tubewell connections with immediate effect and appeal to all the Ministers and MLA’s to shun the power subsidy without any further delay. The Bharatiya Kisan union also welcomed the move. The opposition Shiromani Akali Dal and its ally Bharatiya Janta Party were not present in the House when the Chief Minister made the announcement as they had staged a walkout on another issue. However, the main opposition AAP was present. Taking a dig at the Akalis’ absence, the Congress leader said they should have remained present in the House and listened him out when he was talking on an issue concerning farmers.