Waiver not enough
Raise farm productivity THE Rs 60,000-crore agricultural loan waiver and one-time settlement announced in the budget for 2008-09, welcome as it is, will not be enough to mitigate distress among farmers. According to the C. Rangarajan Committee, only 27 per cent of the farm households take loans from formal sources. Most others borrow from private moneylenders, who charge heavy interest rates and also force the borrowers to sell their crops to or through them at lower-than-market prices. Haryana has passed the Rural Indebtedness Act to check exploitation of small farmers by moneylenders. Punjab only toyed with the idea and then dropped it. Debt is only one part of the problem that has got highlighted due to suicides by farmers. Irrigation is another. There are farmers, particularly in arid and other areas where irrigation facilities are absent or inadequate, who own more than two hectares but are poor because of low productivity or frequent crop failures. They will not benefit from the loan waiver. Though the budget provides more funds for irrigation, it is the states that have to take steps to conserve water resources and meet the irrigation needs of farmers. Farm productivity in India is below global standards. There is need to use biotechnology to improve the quality of seeds as has been done in the case of cotton and strengthen extension services to provide expert advice to farmers on what to grow and how. If farmers are to be rescued from relapsing into a debt trap and agriculture has to be made remunerative, the practice of artificially suppressing farm prices will have to be given up. While the government must ensure payment of the minimum support prices, if global prices are higher the growers must not be denied the added benefit. Last year the government paid much more for imported wheat than what was paid to local farmers. The government burden can be contained if the food, power and fertiliser subsidies are limited to the needy. The M.S. Swaminathan panel has laid the road map for rejuvenating agriculture and this merits closer attention.