Farm loan waive off has been one of the highlights of India budget 2008-2009. As per the debt waiver and debt relief plans of the government, marginal farmers (i.e., holding up to 1 hectare) and the small farmers (1-2 hectare) will have a complete waiver of all loans that were overdue on December 31, 2007 and which remained unpaid until February 29, 2008. In the case of other farmers, there will be a One Time Settlement (OTS) scheme for all loans that were overdue on December 31, 2007 and remained unpaid until February 29, 2008. Under the OTS, a rebate of 25% will be given against the payment of the balance of 75%. The implementation of the debt waiver and debt relief will be completed by June 30, 2008. Upon being granted debts waiver or signing an agreement for debt relief under the OTS, the farmers would be entitled to fresh agricultural loans from the bank in accordance with the normal rules.
Definitely, this step will give an immediate temporary relief to the farming community especially to the marginal and small farmers .Government estimates that about three crores small and marginal farmers and about one crore of other farmers will benefit from the scheme. Money is one of the biggest problems faced by our farmers. Hence, debts write off will mitigate their financial worries to a great extent. Countless farmers have abandoned agriculture as they are neither able to survive with the heavy debts nor are they able to afford it. This is a fact supported by National Crime Records Bureau (NCRB) data based on the studies between 1997-2005. In this background, the latest gesture of the government may, at least, be capable of retaining the farmers to their land and thus saving the future of agriculture in the country.
Another related aspect is that many farmers have been selling off their land in order to pay off their debts. This trend may come to a halt. Otherwise, less and less land would be put to cultivation and, there by, the food supply situation of the nation would be seriously affected. By giving the means to retain farming as an option and by motivating the farmers to pursue cultivation, the government can expect to not only maintain but also to increase the agricultural production. Increase in agricultural production will help the farmers to improve their financial position, provided a good market for the produce. Increased farm income will create beneficial effects in the economy by way of increased consumption. Increased agricultural production will help the government also to attain self sufficiency and to reduce the reliance on the imports which, in turn, have several positive implications.
The waiver scheme has an humanitarian aspect especially in the background of mass farm suicides. NCRB data from the studies between 1997-2005 reveals that 1.5 lakh farmers committed suicide all over India. Being a welfare state, the government cannot overlook the issue and this measure is a step in the right direction. On a second thought, the waiver scheme seems to be eyewash as only superficial attempts have been made to address the grief of the farm community. The loan waiver condition of land holding limit deprives many farmers the benefits of the scheme. Further, many farmers have approached private moneylenders as they were not entertained by the regular banks. Besides, the provision that after the debt waiver and debt relief programme, they can approach the banks as usual will put them back to their earlier miserable situation.
India is still basically an agrarian economy where the majority of the people depend on agriculture for their existence. Further, in India, population is very high and unemployment is a burning problem. Agriculture requires and demands serious attention from the nation builders. The present debts write off is only a temporary step. It helps just to tide over the present issue. Once the debts are cleared off, for whoever the scheme is applicable, the story is again the same as before. Dearth of finance is an acute and a basic problem faced by the farmers. Instead of a temporary adjustment, a permanent solution is what that is required. We are countries who carry out national planning for a minimum period of five years. Hence it is possible to frame and implement permanent arrangements.
The debt write off plan should have been backed up by efforts to motivate and strengthen the agrarian community. Farmers should have the feeling and the confidence to continue farming. A conducive atmosphere for farming should be provided by the government. Further, strengthening measures also should come from the side of the government. The government should provide strong financial, infrastructural, which includes marketing too, and technological base to the farmers. Farming should be taken out from the ambit of subsistence farming to the level of commercial farming. Agriculture also should become a business, a profitable business. This may be true for a microscopic minority of big farmers. It is time to change this exclusiveness and to make it general so as to include the entire farmers. This will maintain farmers back in agriculture and will also inspire many more to take up farming, there by, ensuring a bright future for the farm community and for the country.