BHARATIYA KRISHAK SAMAJ (Indian Farmers' Organisation)
PRESS RELEASE
Modified Farm Loan Waiver Package Does Not Address The Problems Of Small And Marginal Farmers In Dryland Areas
May 24, 2008 : The Union finance minister Mr P Chidambaram's modified farm loan waiver package announced on May 23, 2008 has ignored the genuine problems of millions of toiling farmers in the dryland areas of the country.
The package is a slight improvement over that announced by the finance minister in his Budget speech on February 29, 2008 as it has included dairy, poultry farming, goatery, sheep rearing, piggery, fisheries, bee keeping, greenhouses, bio-gas, plantation and horticulture sectors for bailing them out of investment loan burden. It has also proposed to lessen the investment loan burden for direct farm activities like digging and deepening of wells, installation of pump sets, purchase of tractors and bullocks and land development
It is unfortunate that after repeated suggestions made by farmers' organization and by Bharatiya Krishak Samaj in particular, the finance minister despite recognizing the problems of farmers in dryland areas did nothing
Mr Chidambaram while making a statement before the media on May 23 said "It was brought to our notice that in dry and unirrigated areas of India holdings are usually more than 5 acres, and if you limit the relief to 25 per cent, a large number of farmers will not get adequate relief. They will get relief of 25 per cent but they may not be adequate."
What did Mr Chidambaram do ? He did not change the criteria for marginal farmers defined by holding up to one hectare (2.47 acre) and that of small farmers with holding up to two hectare (5.94 acre). This general definition of small and marginal farmers can be applied to irrigated areas which grows more than one crop and cannot be extended to dryland areas where farmers depend upon erratic rainfall in absence of any irrigation facility.
Mr Chidambaram must have a look at the recent edition of Union agriculture ministry's Agricultural Statistics at a Glance, resource poor farmers in dryland areas of Rajasthan have holding ranging between 54 acre to 175 acre. These lands do not have any assured irrigation and are entirely dependant on erratic monsoon rains. Similar are the cases in other parts of the dryland regions in different states like in Tamil Nadu where the holding is up to 60 acre, in Haryana, Madhya Pradesh and Maharashtra up to 54 acre, in Sikkim up to 50 acre, in Uttar Pradesh up to 45 acre, in Andhra Pradesh between 35 to 54 acre, in Bihar up to 30 to 45 acre, in Gujarat between 20 to 54 acre, in Haryana up to 54 acre, in Himachal between 30 to 75 acre, in Orissa between 30 to 45 acre.
Ignoring the basic facts of the dryland farmers, the finance minister insists the one time debt settlement scheme (OTS) suggested by him with government bearing only 25% of the debt burden is sufficient to fully bail out dryland farmers. He that OTS is restructured and now the relief from the government's side would be 25% of the debt burden or Rs 20,000 per farmer whichever is higher. He said ;" Of them, how many will get full benefit of Rs 20,000 and what will be the proportion. We have done an exercise. We have found that on an average, the larger farmer that is more than 5 acres, these areas has a short term crop loan of about Rs. 19, 908 and the average size of the investment loan is Rs.13,224. If you take these numbers according to our calculation, roughly 60-65 per cent of large farmers in these 237 districts will get not 25% relief, but full debt waiver. Because the debt waiver is now Rs.20,000 whichever is higher."
The finance minister should know that there are many farmers in dryland areas who take large size loan, even larger than what he has mentioned.
The finance minister was clever to select 237 districts as dryland districts. He selected only those districts where the government's programme like DPAP and DDP are initiated. He also considered 31 districts earmarked for Prime Minister's special relief package of 2006. The finance minister should know there are many dryland areas in the country where government's programmes are yet to be initiated.
How many farmers are likely to be benefited by Mr Chidambaram's package. The Rangarajan Committee has said only 27% farmers are covered by institutional credit. This package is only for farmers who source institutional credit and not for those who source credit from other sources.
According to the 2001 Census data, 742.6 million people or 72.2% of the country's population live in rural areas and are directly or indirectly dependant on agriculture. The average annual exponential growth rate of the population is estimated at 1.95%. Out of the total population of 742.6 million people, Mr Chidambaram has identified 40 million people as beneficiaries under the Rs 71,680 crore loan waiver package.
Finally I would like to say that if the government is sincere in solving the farmers' problems, it should take care to work out a package for benefit of majority of farmers.
Dr KRISHAN BIR CHAUDHARY
President
BHARATIYA KRISHAK SAMAJ
New Delhi, INDIA