Farm Distress Rings Alarm Bells For Politicians
Alarm bells are ringing for the Centre and state governments with farmers on the warpath in different parts of the country. Left with no option they are committing suicide being unable to repay the bank loan and in a considerable number of cases find themselves at the mercy of the money lending sharks.
A loan waiver is nothing short of buying temporary peace as evidenced in Maharashtra. That cannot be said about Madhya Pradesh where chief minister Shivraj Singh Chouhan sat on an indefinite satyagraha only to end it abruptly after 28 hours. This was after the firing in Mandsaur in which five farmers were killed in police firing.
Chouhan’s image as being dedicated to the cause of farmers has suffered a grievous blow. The states with little manoeuvering space were left with no option but to announce loan waivers. They will find it difficult to bear this heavy burden on their own.
It assumes importance with the Union Finance minister Arun Jaitley announcing that the Centre is unlikely to bail out the states going in for loan waiver. In Maharashtra the amount is no less than Rs 1.35 lakh crore. What has compounded the problem are the low prices of the commodities well below not only the minimum support price (MSP) fixed by the government but even less than seasonal rates.
One of the follies of the political leadership is to look at short term gains rather than taking an overall view after a proper assessment of the prevailing situation and working in a determined manner for sustained and multi-pronged development on the agriculture front.
The problems of farmers is manifold encompassing vast tracts of land that are drought prone, rainfed and areas affected by floods along with the lack of direly required irrigation facilities.
There are several other aspects pertaining to the problems faced by the poor and marginal farmer. It has been suggested that farmers be given a one-year break on debt servicing.
Most importantly the government must pursue long term solutions which has been the bane of the political leadership all along. For many yars the MSP has been dropping below the annual inflation and in real terms the farmer is being paid less and less for his produce. This is in addition to their family size growing coupled with shrinking land-holdings.
Another disturbing aspect is that the MSP is used as much as a monetary policy tool as an agricultural policy intervention. It is often used to keep inflation in check and loan waivers have become a political compulsion. As evidenced in the past, short term political expediency must give way to long term solutions to problems in the farming sector.
While loan waivers yield political dividend, it causes systemic changes to the farm credit market and does nothing to end the debt trap five years hence. The rural economy and the agricultural sector in particular have been in distress for quite some time now.
The distress started three years back worsened with two back-to-back droughts in 2014 and 2015. It was also due to declining farm gate prices of a majority of crops since 2014. It has become imperative for the Centre and the states to rework their agricultural policies taking advantage of the technology available.
The community of unhappy farmers is a cause for worry among politicians. The government cannot waste any more time in creating the necessary infrastructure linking farmers to urban centres. The farm economy is inexorably linked with the rest of the country.
The government has to invest in irrigation, transport, storage facilities, R&D and environmental regulation allowing markets to function backed by insurance along with boosting productivity.
Meanwhile, BJP president Amit Shah is travelling to Maharashtra to assess first hand the distress to farmers and the magnitude of the problem. Meanwhile, farmers in Haryana are also demanding farm waiver in the wake of a disastrous potato crop.
In all this the question is can the Modi government ignore the signs of an economic slowdown! On its part the Bharatiya Mazdoor Sangh, the trade union wing of the RSS, emphasised that the government needs to focus on creating jobs in the small and micro sectors.