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HT Explainer: Why Punjab farmers seem unhappy with govt’s debt waiver scheme?

Experts say even if the entire debt was waived, the farmers would fall into the trap again as agriculture is not economically viable and the agriculture sector needs a policy overhaul.

punjab Updated: Jan 09, 2018 10:03 IST
Gurpreet Singh Nibber
Gurpreet Singh Nibber
Hindustan Times, Chandigarh
HT Explainer,Punjab farmers,debt waiver
Farmers displaying their cheques received under the crop loan-waiver scheme in Mansa on Sunday.(HT Photo)

In the run-up to the assembly polls in January last year, Capt Amarinder Singh as chief ministerial candidate of the Congress made a lofty promise of waiving the entire debt of state farmers.

During his campaign, he would make farmers fill claims forms in which they would be asked to disclose the debt amount and would send them messages on their mobile phones to reaffirm his promise.

Experts in the T Haque panel and farm economist Sardara Singh Johl have challenged the premise that debt waiver was a solution to the problem.

The Congress used the slogan “karza, kurki khatam, fasal di puree rakam” (End to debt, recovery and full payment for crops) to woo the farming community during its campaign.

After coming to power, the Congress government in its first cabinet meeting took a policy decision on farm debt waiver and in June the CM announced in the Vidhan Sabha to waive up to Rs 2 lakh loan of the state’s marginal and small farmers.It took the government six months to roll out the policy.

Here is a 360-degree look to find out why farmers are not happy with the implementation.

What was the promise?

In the budget session of the Vidhan Sabha called in June last year, CM Capt Amairnder Singh announced to waive off farmers’ debt based on the recommendations of the T Haque panel. Haque suggested to waive debt up to Rs 2 lakh for small and marginal farmers. With this, the government proposed to cover nearly 10 lakh farmers with a total debt waiver of Rs 9,500 to Rs 10,000 crore.

How different is policy from the promise?

When the policy was rolled out it came as a shock for the farmers as the government decided to cut down on the expenditure bringing in a clause in the policy that a small farmer (with land 2.5 to 5 acres) will not get any waiver incase his outstanding amount is more than Rs 2 lakh, while a marginal farmers (with land up to 2.5 acres) will get a waiver up to Rs 2 lakh even if the outstanding amount is more.

What hiccups is the government facing?

The state government is facing a deep financial crunch due to which it is not able to cover all farmers in one go. The government decided to cover marginal farmers who owe money to cooperative banks, followed by small farmers who owe money to the state banks.

After this, the government would cover the outstanding loans of farmers in two categories, i.e, who have borrowed from the nationalised banks and private sector banks.

So far, the government has identified 5.63 lakh farmers in both categories of which 1.61 lakh in the marginal category have been finalised to avail Rs 780 crore waiver. Arranging funds for waiver is a big issue for the government which is using rural development funds collected from sale of agricultural products for the debt-waiver scheme.

The chief minister has promised to waive debt on farm labourers also, but so far no policy has been announced for them.

Why farmers are angry?

During the social audit in which the government agencies pasted lists in the villages, a large number of small farmers found their names missing. Also, many farmers got meagre waiver with some as low as Rs 3 or Rs 7, which annoyed the farming community. The CM, who reached Mansa on Sunday, also admitted to lapses and clarified that all farmers will be covered under the scheme. Also, farmer unions and opposition parties — Shiromani Akali Dal and the Aam Aadmi Party (AAP) — are not leaving any chance to bring government on the mat on the waiver issue. The AAP has even resorted to protests. The officers of three state departments — cooperation, revenue and agriculture who are involved in the debt waiver process — also admit that waiver has become a chaotic issue.

What’s govt doing for farm labourers?

The chief minister has promised to waive debt on farm labourers also, but so far no policy has been announced for them. There are an estimated 10 lakh farm labourers in the state with each having an average debt of Rs 77,000.

Is loan waiver an answer to problem?

Experts in the T Haque panel and farm economist Sardara Singh Johl have challenged the premise that debt waiver was a solution to the problem. They say even if the entire debt was waived, the farmers would fall into the trap again as agriculture is not economically viable and the agriculture sector needs a policy overhaul.

First Published: Jan 09, 2018 10:02 IST