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Farmers

  • Getting It Right

    Loan waiver for farmers is a good beginning M K Venu A former bureaucrat who had worked with finance minister P Chidambaram in 1997 summed up the 2008-09 Budget aptly in the words of Edmund Burke: "Mere parsimony is not economy. Expenses and great expenses may be an essential part in true economy'. The bureaucrat in question, former revenue secretary N K Singh, had then designed one of the most liberal tax amnesty schemes for the urban rich with a view to mainstreaming sources of black money generation. The amnesty programme had later prompted even the Supreme Court to comment that such schemes must not become regular practice. Those were difficult times when a prolonged growth slump in much of Asia had led to sluggish revenue collections year after year. Budget targets were rarely met, if at all. Consequently, the government had to resort to amnesty schemes, in desperation, to collect more revenues. Things have dramatically changed in recent years. Asia is fast becoming the engine of growth, and India is a big part of the story. The government's revenues have soared from about Rs 2,54,000 crore in 2003-04 to Rs 5,85,000 crore in 2007-08, more than doubling in four years. With its coffers overflowing, the UPA government has chosen to embark on a "great expenses' programme. And why not? If you could give amnesty to the rich in difficult times, why not amnesty to the poor, distressed farmers when the coffers are full up? The Rs 60,000 crore farm loan waiver may have some design flaws, but no one today should quarrel with the sentiment that agriculture, and the small farmer, do need a leg-up. Clearly, the distress in the farm sector in recent years has created an adverse political climate for the UPA, which has been a bit shy of selling more aggressively the unprecedented GDP growth India has seen in the past five years. It is obvious that you cannot sell high GDP growth and bulging forex reserves in large parts of rural India which are in distress. This had also become a cause of persistent friction between the Congress and the Left within the UPA alliance. All this while, it would appear, it is this political tension which had resulted in the growing communication gap between the Congress and the Left. This may have had its spillover effect even on the nuclear deal. The Left would seem to have been somewhat assuaged by the Budget proposals. The CPM general secretary Prakash Karat has for the first time welcomed the farm and social sector programmes announced by the finance minister. This may signal a temporary thaw in the relations between the Congress and CPM. There is talk that the nuclear deal may also get revived, and the Left may not do any more than make some routine noises over it. The larger issue is one of creating a conducive atmosphere in the political economy to build a consensus for further reforms that are critical for India's economy to sustain a 9 per cent growth for the next five years. The massive farm loan waiver and higher spending in social sector programmes must be appropriately used now to bring down the political opposition to further reforms which are important to propel India to the next level in the globalisation sweepstakes. The Budget in some ways has signalled a New Deal, in which every section of society has benefited, whether it's the urban middle class or the rural poor. But these benefits must now be accompanied with some obligation to work towards a common goal. The one common objective, with which the CPM must have no quarrel, is promoting higher levels of industrialisation. The CPM has also formally recorded in its party document that rapid industrialisation is necessary and there is an urgent need to move people from low yield agriculture to industry. Prime Minister Manmohan Singh too has been placing repeated emphasis on this. The only caution that needs to be exercised is this process must be conducted in a democratic, bottom-up fashion. This was the prime lesson of Nandigram and Singur. The farm loan waiver must be seen as a purely temporary relief and there must be some programme by which farm families locked in low-yielding, suboptimal farm activity are moved to non-farm sectors. After one loan waiver, there is no point in their getting into another loan to do unremunerative agriculture. This would be a recipe for future fiscal disasters. Some permanent institutional arrangement must be designed by the Centre and states together to ensure that inherently remunerative farm activity gets a boost with technical, marketing and financial support. The other farm families must be encouraged through new skill development programmes to move to the manufacturing sector. This needs to be done in a focused manner. The Left Front government in West Bengal has designed an elaborate scheme, after the farmer protests in Nandigram, which seeks to handhold farm families for years after their shift to manufacturing townships built on their land. If done democratically, this is the only way to design a long-term solution to the problems of India's farm sector. A rapidly globalising economy just cannot afford 60 per cent of its population in agriculture sharing less than 20 per cent of the national income. This will remain the biggest point of tension in our political economy. The massive farm loan waiver in the Budget only addresses the symptom. Much more needs to be done to address the root cause. The Rs 60,000 crore loan waiver, at least, brings the whole issue to the centre stage. That is clearly a plus.

  • Physical road connectivity between urban consumption markets to farmlands

    Storage infrastructure and setting up processing facilities for our farm products are major issues and need immediate attention of policymakers to accelerate agricultural growth, says former power minister and MP, Suresh P Prabhu LACK of adequate infrastructure in the hinterland and poor connectivity are major reasons behind slow agricultural growth. Better communication infrastructure is urgently required to maximise benefits of scientific innovation in enhancing farm produce. Since there is a limit to expanding the farm land, I strongly believe that there is no alternative but to put together a credible agriculture infrastructure to meet the rising demand in India for foodgrains and other agri-products and also make decisive inroads into the external markets. Access to markets Beginning with physical road connectivity between the urban consumption markets to farmlands, setting up storage facilities to processing facilities for our farm products is one big issue that needs to be tackled by the policymakers in the country. Very often, I have witnessed heated debates in the Parliament on farmers' issues. Inadequate or lack of farm infrastructure is not limited to just India. It is a phenomenon in the entire South Asian region. Massive investments in building this infrastructure in agriculture and related farm-based industries are the only answer as we make efforts to maximise our productivity from the farmlands. Scientific research and technological innovations would make our investments more productive. Billions of dollars need to be set aside for laying rural roads, setting up cold storage, post-harvest processing units, quality and affordable inputs like seeds, fertilisers and water apart from undertaking massive diversification into horticulture, floriculture and allied areas like livestock, poultry development. Insulating Indian agriculture from vagaries of weather is another big challenge as the infrastructure for water storage, smooth flow up to farm-gate apart from ensuring judicious use needs emphatic focus. Only then the double-digit GDP growth envisaged during next five years would be possible. Common concern Farm infrastructure development assumes a lot of significance as the South Asian region led by India is home to 35% of the world's hungry and 40% of the world's poor. About 70% of these people belong to India. The country's borders with other South Asian countries are often porous for flow of agricultural inputs, products and human resources, but its formal trade, particularly its import with its neighbours, is not as intense. Authentic estimates corroborated by FAO figures project that the country's food production will exceed human food demand and sizeable surpluses of cereals, fruits and vegetables, potatoes and milk will be available, which will help strengthen the proposed South Asian Food Bank once the infrastructure bottlenecks are sorted out. As stated earlier, agricultural growth in recent years has thrown new sectors and regions into prominence. Livestock, fisheries, horticulture, specialty enterprises (spices, medicinal, aromatic, organic) and value-added products illustrate this trend. Market-driven diversification, emphasising the role of the private sector, in a global perspective, has become the new paradigm driving future agricultural growth. Alternative instruments and approaches are evolving to transform agriculture and a very important part of this

  • Loan waiver scheme for all farmers

    Seeking to stave off criticism that the Centre's loan waiver scheme would mainly benefit defaulting farmers, the Congress Government in the State has decided in principle to extend it to those farmers who have promptly repaid their debts. The State Government will initially request the Centre to somehow allow the benefit of waiver to all farmers or, at least, bear the financial burden partially. If there is no positive response from the Centre, the Government may work out a scheme on its own. Chief Minister Y. S. Rajasekhara Reddy held detailed discussions with Ministers and senior officials here on Thursday on the loan waiver scheme. Apart from the Opposition's criticism, Dr. Reddy has himself expressed reservations on the scheme benefiting only the defaulters while ignoring those farmers who repaid their debts sincerely. He is credited with the view that it would benefit only 50 per cent of the small and marginal farmers even though the expenditure on it in the State would be around Rs. 10,000-12,000 crore. Speaking to reporters later, Finance Minister K. Rosaiah said the Government would formulate its plan once the Centre issued guidelines on the scheme which would reveal the actual number of beneficiary farmers and also the extent of the financial burden. Essential commodities Mr. Rosaiah said another scheme on the anvil, also outside the budget proposals, was to ensure sale of some more essential commodities in addition to rice, to card-holders at subsided prices and thus arrest inflationary trend in the open market. Edible oil would be sold for Rs 60 a kg and red gram for Rs 35 a kg. Asked whether the Government was justified in taking these policy decisions without referring them to the Legislature, now in its budget session, Mr. Rosaiah said the Chief Minister had already informed the Assembly about the plan to sell oil and pulses at subsidised rates while the loan waiver for SCs and STs announced on Wednesday was a relief and not a policy decision.

  • Debt relief to farmers

    THE Budget 2008-09 was projected long before as a "kisan budget' that would announce relief measures adequate enough to mitigate the misery of our farmers who have been reeling under a debt-trap.

  • NDA blamed for agrarian distress

    Prime Minister Manmohan Singh and United Progressive Alliance chairperson Sonia Gandhi virtually launched the Congress party's election campaign here on Sunday with a frontal attack on the BJP-led N

  • Oh! What a lovely waiver

    Karza maafi or voter maafi?: File picture of the relatives of a farmer who committed suicide due to mounting debt last year.

  • Paddy farming faces setback as Pabna farmers cry for rain

    IRRI-boro paddy cultivation in Pabna is facing a setback because of a drought-like situation for lack of rain. The farmers are now crying for rain.

  • Will the loan waiver relieve farmer distress?

    Ultimately, it boils down to whether a loan waiver will help without taking action to improve irrigation facilities and to ensure remunerative prices for farmers. Vijay Jawandhia President,

  • Poor farmers hit the ceiling

    Hundreds of poor farmers are up in arms against the district administration for delaying registration of a criminal case against "bigwigs' allegedly involved in the 450-acre surplus government lan

  • Loan waiver cheers DCCB

    The farm loan waiver announced by the Central government has come as a boon to the District Central Cooperative Bank (DCCB), which is facing financial problems with bad debts amounting to Rs 200 crore

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