Saturday, June 17, 2017

Loan waiver this time could set a bad precedent’-TIMES OF INDIA

Loan waiver this time could set a bad precedent’

TNN | Jun 18, 2017, 03.50 AM IST

It's a paradox. The year that saw Maharashtra recording the best ever performance in agricultural growth also turned out to be unhappiest for its farmers. Seeking better prices for produce and a loan waiver, farmers in parts of the state took to streets. Political pressure mounted by all non-BJP parties forced the Devendra Fadnavis government to concede the demand for crop loan waiver.
Kishore Tiwari, a farm activist drafted by Fadnavis to head a task force to address agrarian distress, says the farm waiver decision could be a big blunder for the state reeling under external borrowing of over 4 lakh crore. It could set a bad precedent because of its wrong timing and political compulsions.
While the specifics of the waiver are yet to be decided, opposition parties, frustrated by their electoral debacle in almost every election in the Narendra Modi era, want a blanket waiver covering every farmer. This could doom the state's already precarious economy, feels Tiwari. 

Excerpts of an interview...

Q. As an activist you always pitched in for government bailout packages to rescue distressed farmers. Why do you say that waiver was not required this time?

A. I am saying this with full responsibility. Being part of the government effort to remove farm distress, I have received full support of chief minister Devendra Fadnavis. Together we took unprecedented steps like spreading the institutional credit net to cover almost 74% of the farmers. Tweaking the scheme, farmers were included in the Rajiv Gandhi Jeevandayi Yojana to provide health security while food security for all farmers was provided in 14 distressed districts.
The state was on the top in implementing Modi's plan of doubling farmers income. It had done tremendous work in providing protected irrigation and helped in increasing farm yields manifold. This the state succeeded in clocking highest agriculture growth of 12%. We were on the right track and moving towards goal of freeing farmers from debt trap. The waiver decision could set the state back and negate all that we achieved. Waiver is hardly a sustainable solution to the agrarian crisis we are facing.

Q. So why you think Fadnavis succumbed to the Opposition pressure?

A. The frustration level among all political parties, including the Shiv Sena, is at a peak. They see that the BJP juggernaut is difficult to stop. So they pooled in their resources to whip up farmers' frenzy and turning it into a threat to law and order threat. The Shiv Sena defeat in Panvel municipal elections was the last draw leaving the party with no option but to counter the Fadnavis government. So what started at Puntambe village as a Left-driven call for a strike was fuelled into a strife mainly in well-off western Maharashtra.
Sadly, it looked like Fadnavis was left to face the situation all by himself. He had no support from his team of ministers who stood watching the situation from a safe distance. The opposition rhetoric worked and farmers skipped repayment of bank dues anticipating a debt waiver. A waiver after a prolonged period of bad crops makes sense. But not in a year of bounty. To make it worse, a senior minister jumped the gun to declare a blanket waiver when Fadnavis had earlier guardedly agreed for only waiver for old defaulters, mainly small and marginal farmers unable to clear bank dues. This could now add up to be a liability of Rs1.10 lakh crore, instead of Rs32,000 crore waiver that Fadnavis envisaged.

Q. Surely low prices to tur and other crops was a genuine grievance of farmers?

A. The credit of mobilizing farmers to increase tur production this year became a problem. This was because of major policy glitches. Though a glut was forecast well in time, the Centre imported tur which hit the domestic pricing. Farmers felt cheated because of procurement delays by the government agencies. But what the government may not admit was the blow dealt to farmers by demonetization move November onwards. The rural economy came to halt and farmers were worst sufferers. So, ironically, farm sector got rich but farmers got poorer because of low prices. 

Q. Is it not possible for the government to increase MSP and implement MS Swaminathan's recommendations?

A. The UPA-I had realized more than a decade ago that implementing Swaminathan report was not feasible. It was the Congress government that ushered in the globalization. So how could it roll back and give huge subsidies in order to accept Swaminathan's suggestions. Take cotton for instance. If, today, MSP is fixed to provide 50% profit above input costs, a quintal would have to be paid Rs8000. This will mean providing subsidy of Rs3000 a quintal, amounting to burden of around Rs4 lakh crore on state exchequer. This subsidy goes against the WTO pact of which we are a signatory. it is just not practical. Even Swaminathan realizes that his report is outdated and Modi should be given time to show results for measures he is taking.

Q. What could be the consequences for the state now?

A. It will be a sad day for the state if political designs on caste lines against Fadnavis are allowed to succeed. He is the best bet for the state's future. He works 18 hours a day and has achieved so much in short span of less than three years. He had no previous experience of administration. To make matters worse his team of ministers also is not all that supportive or experienced. A majority of bureaucrats are yet to break free completely from the previous Congress-NCP government mindset.

Fadnavis should deal with an iron hand and continue his good work protecting best interests of the state. The waiver may send a wrong signal to the regular and sincerely repaying sections. There is also a serious threat of civic society unrest, the taxpaying community refusing to take more in the name of bailing out the farmers. The Centre should also realize its role and come to the aid of the state instead of shrugging off its responsibility when it refuses to ease its control on agriculture costs and pricing.

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