Govt must act swiftly to give farmers relief

The reactions of the Centre and BJP-run states to the agriculture question — with at least six farmers killed in police firing in Madhya Pradesh’s Mandsaur and the rounding up of farmers peacefully protesting in Maharashtra — suggests that the BJP has little grasp of farm economics and its impact on the nation’s economy. A prominent leader of the RSS-controlled farmers’ union, the Rashtriya Kisan Sangh, was even quoted as saying that the nation’s farmers were “not a priority” for the BJP government.

On Sunday, Maharashtra announced loan waiver for farmers totaling Rs 34,000 crores. Chief minister Devendra Fadnavis had said days earlier that any decision on loan waivers would only be announced by October 31. But he clearly realised that the political cost of a continuing agitation, that could turn violent, was best avoided. Mr Fadnavis is, however, silent on the issue of the desired minimum support price. Shivraj Singh Chouhan’s Madhya Pradesh government has ruled out a loan waiver.

Union finance minister Arun Jaitley has, meanwhile, said that states announcing loan waivers must do so entirely out of their own resources. He’s yet to tell us, though, if the Rs 36,000-crore loan waiver bill in Uttar Pradesh, that was announced by the Yogi Adityanath government as Prime Minister Narendra Modi committed himself to this in the Assembly campaign in March, will be footed entirely by Lucknow with no help from New Delhi.

With GST to be rolled out soon, and states acting wary if they’ll earn less tax revenues as a result, it’s doubtful if states can cope with loan waivers for farmers without the Centre’s assistance.

However, if farmers remain in debt and can’t service their interest obligations, banks will deny them further loans for the next agriculture operations. These loans are needed as farmers’ earnings have been devastated due to poor earnings flow from an abundant crop.

Arguments on banks’ health are being made to deny loan relief to kisans. These weren’t made when top corporate groups defaulted on loans to the tune of Rs 1,70,000 crores. Farmers are about half the country’s population. If they sink into debt and don’t get a decent price for what they grow while they pay very high prices for factory-made inputs, will they be able to enter the market as consumers of goods and services produced outside the village? What will then happen to the national economy?

Farmers’ demands centre on a minimum support price that is 50 per cent above the weighted average input costs, and a loan waiver to tide over as their condition has deteriorated due to the crashing prices of agricultural commodities. The time has come for Parliament to convene to consider the agriculture question as a whole, and for policy measures that need to be taken urgently.