The recent announcement in the Union Budget of waiver of debts owed by a section of the peasantry is being portrayed as a very radical step in addressing the suicide deaths of peasants provoked by indebtedness.

The Prime Minister and the Congress Party president have applauded the Finance Minister for his courage (!) and they have made no secret of their happiness at having stolen the thunder from their arch political opponents, the BJP. In certain states like Maharashtra, the NCP, Congress, Shiv Sena and BJP are all busy vying with each other to take the credit for the loan waiver announcement, with the NCP and Congress Party organizing ‘thanksgiving melas’ of peasants.

While those among the peasantry who stand to gain directly would welcome this announcement, what needs to be evaluated is whether the crisis in Indian agriculture and the acute distress under which the peasantry is reeling will in any way be mitigated by such a loan waiver, as per the claim of the government.

The proposal announces a “complete waiver of all loans overdue on December 31, 2007, which have remained unpaid by small and marginal farmers.” This applies to only those small and marginal farmers who own less than two hectares of land, and who have borrowed from institutional sources, such as the nationalized banks, cooperatives and government institutions. The budget also proposed a one-time settlement (OTS) for other farmers, for all loans that were overdue for the same period by a 25% rebate against a payment of the balance 75 per cent.

Nobody can deny the deep crises of the agricultural economy. The tiller and his family are either committing suicide or dying a slow death because of indebtedness and a steady deterioration in their living standards. A majority of the tillers are unable to earn a decent livelihood to provide for the most basic needs of a family and invest in the inputs for the next crop season. The Finance Minister himself admitted that credit is only one of the factors for the crisis in agriculture and that is precisely all that he is addressing. But can the people condone this? Is a government fit to rule if it does not and cannot effectively address such a life and death situation faced by millions of tillers across the country?

From all over the country, the peasantry’s demands are clear – A secure livelihood to every peasant family through:

  • Cancellation of all outstanding debts
  • Guaranteed procurement prices for all agricultural commodities taking into account the input costs
  • Guaranteed procurement of foodgrains, pulses, oilseeds, cotton and sugar cane, accompanied by prompt payment to the tiller
  • Consistent availability of quality inputs – seeds, irrigation, technical know-how, etc. – at affordable prices

These demands have been raised time and again in the last decade, but neither the present government nor the previous one has addressed these issues. At least three Commissions have submitted their reports during this period, but they have not been discussed seriously to arrive at a set of policy measures that will actually immediately and unconditionally alleviate the peasantry’s dire conditions and in the long run, make agriculture a secure occupation. In the meantime, the overall agricultural policy being pursued is going to deepen the crisis of agriculture. Small and medium peasants will inevitably get ruined and be forced to part with their lands.

Even if one were to evaluate this policy announcement on the question of credit, the conclusion is that it is grossly inadequate as it excludes a large section of the peasantry on two counts. A major part of the borrowing by the peasantry is from moneylenders and not from the formal banking sector. Secondly, the cut off of two hectares irrespective of whether the land is irrigated or rain-fed excludes a large section of peasants in certain states who are by no means well-off but own more than two-hectares. For example, in Vidarbha, the suicide count had exceeded 4,000 in 2004 and many more are debt ridden, but some 18-19 lakh peasants own more than two hectares of land.

Lok Raj Sangathan condemns the Government of India for making a mockery of the deprivation of a majority of the peasants, which is so serious that it has driven tens of thousands to their death. The truth is that the economy is not able to guarantee a livelihood to all those who work and sweat, and the central government acts in the interests of big corporations including the money lending institutions. It has come up with this scheme that promises to be a panacea for all the ills faced by the peasantry, while its real aim is to lay the basis for banks to be able to continue lending to the peasants and ensure regular profits by keeping them indebted. Moreover, this measure will divide the peasantry between those who get some benefit and those who have been left out. Lok Raj Sangathan demands a comprehensive solution to the crisis of agriculture and the misery of the peasants and their families, including waiver of all farm related debt, without exception.

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