Farmers' woes: Without MSP hike, loan waivers won't end agrarian crisis

Delhi, IndiaWritten By: V M SinghUpdated: Dec 19, 2018, 12:30 PM IST

File photo. Photograph:(PTI)

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Loan waiver without increasing the MSP or without a guarantee to ensure that the farmers get the MSP will only accumulate loans in the future.

Assembly election results in five states reflect the anger of the farmers who have waited for four-and-a-half years for the government to fulfil their poll promise of loan waiver and minimum support price (MSP) for the crops in accordance with the Swaminathan report. 

These two demands are the centre point of the countrywide struggle by the All India Kisan Sangharsh Coordination Committee (AIKSCC), an umbrella of 209 farming organisations. 

Sensing the mood of the farmers’ movement, the Congress along with 20 other political parties has signed a resolution to support the two bills, namely Freedom From Debt and Guaranteed Remunerative Minimum Support Prices. 

Instead of one-time complete loan waiver, the Congress party in its manifesto mentioned a waiver of Rs 2 lakh. The Chief Minister of Madhya Pradesh, immediately after being sworn in, has written off loans up to Rs 2 lakh, with cutoff date mentioned as March 31, 2018. 

There is no clarification as yet whether all those who took loans as on March 31, 2018, would be entitled to this benefit or only defaulters would be entitled to the declaration. It should not be like the last waiver by the Congress government at the Centre in 2008-09, which waived loans only of defaulters. 

This would not only end up in large-scale manipulations by bank officers but also dissuade those who have returned the loans in adverse circumstances, by either borrowing or raising money by accumulating further debt.

The farmer usually gets crop loans for six months and it is likely that many of them would have renewed the same in September 2018. These days, the banks have evolved a technique to renew loans. On one hand, loan entry is reversed from the suspense account or any other account at 2 per cent additional cost and on the other, the limit of the farmer is increased, whereby he gets some money for his subsistence. 

In these circumstances, if the farmer has repaid the debt taken by him on March 31, 2018, it would be very unfortunate to exclude him from the loan waiver scheme and would be against the spirit of the agenda to empower the farmers. The only way would be to credit a maximum of Rs 2 lakh in the account of every farmer who had taken the loan as on March 31, 2018.

Loan waiver without increasing the MSP or without a guarantee to ensure that the farmers get the MSP will only accumulate loans in the future. These two demands are closely connected – if the issue of remunerative prices alone is tackled without providing relief from indebtedness, the increased returns will only go to pay back increasing loans. 

On the other hand, if only loan waivers are provided without addressing the issue of remunerative prices, farmers will again be pushed back into the debt trap. Therefore, AIKSCC seeks to secure these two as legal rights for all farmers, through the enactment of two Central legislation. 

The bills were submitted as private member bills by Raju Shetti in the Lok Sabha and KK Ragesh in the Rajya Sabha. They may have been submitted as private member bills, but they have the mandate of all the country’s farmers.

The first bill clearly mentions that it is a one-time loan waiver and would be benefitting all the farmers who have paid the loan or who have defaulted with their payment. The second bill ensures that the MSP is fixed as per the Swaminathan report, i.e, one-and-a-half times the production cost. 

The production cost must be a comprehensive one (C2) wherein apart from input cost (A2), cost of family labour (FL), the interest on capital, rent of land and depreciation of machinery is also taken into account. 

The bill also guarantees that no person can purchase the produce below the MSP and if anyone buys below the MSP, then he would be imprisoned and will also have to pay double the difference of the amount paid and the MSP as a penalty to the farmer. 

This is the only way to get farming back on track. The next generation is not interested in continuing with farming, as agriculture is a losing proposition.

The only way out to discuss and pass the bills, which has the consent of 21 political parties, is by calling for a special session of the Parliament. This is the solution to discuss the agrarian crisis in the present scenario. In the last session the No Confidence motion was not allowed to be taken up due to disorder in the house and no business has been transacted in this session so far. 

If the country can have a midnight special session for GST, don’t the farmers of the country who have been sacrificing their lives to feed the nation, deserve the passing of these bills in the hope of a better living. These bills will ensure that once the debt is over and done with, there is no further debt once the farmer gets one-and-a-half times his production cost, i.e C2. 

All this will go a long way in providing livelihood to the next generation, who in the absence of job availability and agriculture being a losing preposition, are disillusioned and are getting into depression or into drugs.

(This article was originally published on The DNA. Read the original article)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)