Farm loan waiver will not solve the agrarian crisis, says NITI Aayog member

He said a major share of farmers remain out of the gamut of the benefits of the waiver

A member of the National Institution for Transforming India or NITI Aayog Ramesh Chand, while fighting for country-wide implementation of the Bhavantar Bhugtan Yojana, has said farm loan waivers cannot be an answer to the agrarian crisis and farmers’ suicides.

The Maharahstra government has released about Rs23,000 crore to 46 lakh farmers so far. (Pic for Representation)

Chand, who was on the Maharashtra tour, said on Thursday that the funds spent on creating the infrastructure for agriculture will prove beneficial and help reduce suicides. He said that only 60% of the farmers take loan for the agricultural purpose. While 50% of them take it from the institutional credit chain, the remaining get it from private lenders. A major share of farmers remain out of the gamut of the benefits of the waiver, he added.

“This has been experienced even during the loan waiver announced by the earlier government in 2008-09. Every 4 to 5 years, the farmers demand a loan waiver. They end up being indebted very next year of the announcement of the loan waiver. It is time to think if we want to spend the funds to repay the loan taken by the farmers or we want to help them lift their financial level to be in a position to pay loans on their own,” he said.

The Maharahstra government has announced the loan waiver of Rs34,022 crore touting to benefit about 89 lakh farmers. It has released about Rs23,000 crore to 46 lakh farmers so far.

Chand said that the NITI Aayog is advocating compensating the state government for 40% of losses sustained while procuring agricultural produce from farmers at Minimum Support Price (MSP). “The scheme on the lines of Bhavantar Bhugatan Yojana, the initiative implemented by the Madhya Pradesh government, should be implemented across the country to encourage state governments to procure the farm produce at MSP. With funding from Centre, the state governments will be in a position to support farmers in recovering production cost due to falling prices,” he said.

Chand, who was interacting with the media at Mantralaya, was accompanied by Pasha Patel, president of state commission for agriculture and prices. Patel said he has asked the Centre to regulate future marketing as it exploits farmers.