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Thursday, March 6, 2008

Loan Waiver for Farmers

Beneficiaries of Farm Loan Waiver
Recently Government announced a waiver of more than 60000 Crores for farmers holding land of two hectares (Five Acres) or less. The loan which will be waived off will be only for those who have taken this loan from Government recognized banks. Government has promised to complete the implementation by 30 June 2008.
The declaration seems to be more of impromptu exercise as preparation for Lok Sabha elections, which are likely to get schedules earlier than actual term.
Look at various beneficiaries and anomalies of this waiver:
Different Amount Waiver for Different People
People who have better clout in banks can avail more loans on the same land compared to who don’t have clout. Thus people holding five acres of land or less is useless parameter to decide the waiver.
Prosperous farmers are benefiting more
There is huge disparity in the rates of farmlands across country. People holding ten acres of land in non – irrigated belt will be poorer than person holding just one acre in irrigated area. Also loans that you can get on the farmland are not based on size of land but on the rate of land. So it is very likely that people with just two acres of land in prosperous area will get more loan than person holding ten acres in non – prosperous area

Real needy farmers are left out
If you look at the farmers who have been committing suicides are people belonging to region which falls under non – irrigated region. The holding of land in these region is generally higher compared to in irrigated areas.

In Vidarbha region farmer holding ten acres of land is still not as prosperous as farmer holding just five acres in Western Maharashtra.

Suicides will not stop with this action
Most farmers who have committed suicides haven’t committed it because of burden of bank loans, as farmers in this bracket anyway don’t get loans from banks and they are forced to take it from money lenders who may not be registered with Government.

I think unless the root cause is analyzed we may not be able to put brakes on suicide happening

Don’t give them fish , teach them fishing
These loan waivers may take care of easing out pressure on some farmers but what about remaining ones?

  1. Why government doesn’t keep reservation for family members of farmers for education?
  2. Why government doesn’t allow them to look for alternative means of earning and enable them to search and use it?
  3. Why government doesn’t provide good rates for the farm produce?
  4. Why government doesn’t invest in irrigation projects in non- irrigated lands?

    More of such points can be raised. Most important point is whom will this waiver really help ?
  • This loan waiver will really help some ministers whose regions might have been benefited to maximum extent with this scheme.
  • It might benefit the existing government as they have at least positive inclination towards the farmers.

    But remember one thing, farmers who are not getting benefited are much more than ones who are getting benefited, so beware!!


Chandresh Adhiya said...

If Government can fund small amount lets say 5 crore per year for Ten Years for , we can help in getting the suicide rates down....I am sure it doesn't require 60K Crores of tax payers money to be wasted in waiving off loans....

Rakesh Sinha said...

Fake promises by government.
joint ventures in patna.

steve jobs said...

Those who have more balance in their Banks can take more loan.
But this Loan Waiver will be beneficial for farmers.
2bhk for sale bseb colony patna bihar

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