Thinking Together

Q: The BJP government has announced a loan waiver for marginal and small farmers up to Rs One lakh.  What is the CPI(M) stand on waiver of farmers’ loans? Can it be justified for all farmers?

 S Manickam



CPI(M) views waiver of farmers’ loans as a necessary step in times of agrarian crisis, crop loss and loss of livelihood due to natural calamities like floods and droughts. However, any loan waiver could at best be a palliative that provides temporary relief while the root cause of the agrarian crisis, ie, the implementation of neoliberal economic policies continues more vigorously under ruling class parties like the BJP and the Congress as well as many regional parties. To bring farmers out of the debt trap as well as low income equilibrium trap, these policies have to be reversed, public investment in agriculture, irrigation and rural development as well as enhancement of productivity and cutting costs of cultivation with assured procurement at remunerative prices is indispensable.

Loans of all landless, tenant farmers, poor marginal and middle farmers as well as agricultural workers must be waived and the benefits should not be cornered by the landlords and rich. When there is acute agrarian crisis and severe drought in many states such steps should not be predicated on electoral considerations. It must be based on the severity of the crisis and the worst affected should be provided relief. Notably, claims of states like Tamil Nadu which is facing the worst drought in 140 years for drought relief of Rs 40,000 crores as also similar demands from drought-hit Karnataka, Kerala etc are met with insensitivity by the Narendra Modi led BJP government.

The Yogi Adityanath led BJP government in Uttar Pradesh has announced a loan waiver for marginal and small farmers up to Rs One lakh. This move is welcome but is inadequate and is only a partial implementation of its election promise of debt relief for the small and medium farmers. Landless, tenant farmers, poor small and marginal farmers and agricultural workers who are mostly out of the purview of institutionalised credit miss out. It is notable that the VS Achuthanandan led LDF government in Kerala had set up a Debt Relief Commission and even loans taken from private moneylenders were waived. 

National Sample Survey on farmer incomes and indebtedness in 2013 found the monthly income of farmers in Uttar Pradesh to be only Rs 4,923 much lower than the meagre national average of Rs 6,426 per month. This is also lower than the average monthly consumption expenditure of Rs 6,230 implying that a farmer in Uttar Pradesh is burdened by a deficit of Rs 1,307 every month. The average monthly income of a farmer in Punjab is almost thrice as high at Rs 18,059. This indicates the sorry state of farmers in the state constraining them from making investments in agriculture, and the average monthly expenditure on productive farming assets in the state was only Rs 446 per farmer household as opposed to national average of Rs1,013. It was as high as Rs 9,264 in Kerala and Rs 13,681 in Haryana. 

Hence, while the loan waiver move can act as a temporary relief to the indebted households, unless there are steps to reduce costs of cultivation by providing quality inputs at subsidised rates, enhance productivity, provide remunerative prices according to the Dr Swaminathan Commission recommendations with assured procurement, provide cheap institutional credit, ensure public investment for infrastructural development in irrigation, effective insurance from yield and income losses, affordable scientific storage facilities and agro-processing industries for value addition, the farmers will continue with abysmally low incomes and will never be able to come out of the debt trap. The Narendra Modi led BJP government had promised all these but has betrayed farmers who reposed faith in it. The huge income losses due to demonetisation have not been taken into account and no steps to increase investment in agriculture or provide incentive to farmers for the next season have been taken. In such circumstances while there are tall claims that 86.68 lakh farmers will benefit and the state government will have an expenditure of Rs 36,359 crores the disease would continue to remain untreated.

Newsletter category: