March 22, 2018, 11:44 am IST
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Loan waiver not the answer, says expert

Loan waiver not the answer, says expert

 Mar 13, 2018

Farmers’ agitations across the country have invoked the recommendations of the MS Swaminathan Commission to press for their demands which also included waiver of loans on a number of occasions. States like Maharashtra, Uttar Pradesh, Punjab and Rajasthan have come up with their versions of farm loan waivers in order to stop farmers unrest from turning into a political issue.

However, Prof.  Swaminathan, who is the author of the recommendations of the National Commission on Farmers (NCF), feels farm loan waiver is no solution to challenges being faced by farmers. 'The demand for loan waiver is indicative of non-viability of farm economics. Every step should be taken to make farming economically viable,' he said.

'I am sorry to say that very simple and short-term strategies like loan waiver are adopted. Writing off the loan is not the best way to tackle the distress in the farming sector,' he said. 'Loan waiver is only an easy way to get a new farm loan. But writing off does not guarantee repayment of the next loan unless farming is made viable,' he was further quoted as saying.

While pointing out that he was not against loan waivers, Prof. Swaminathan added, 'I am all for loan waiver if it is part of a strategy to revive the economic health of farming,' he said, suggesting that 'apart from writing off loans, the focus should be to ensure how the loan is repaid. For this, farming economics needs to be fixed.'

He also underlined the need to focus on trade, technology and training-related requirements of the agriculture sector to save farmers from tough situations.'In particular, aspects related to technology, trade and training in the farming sector needs to be attended in a much deeper way. Say, we need to train farmers for climate-smart farming now on,' he said. The distress of farmers has led to protests across the country. In its Union Budget last February, the Centre announced the implementation of a version of the Swaminathan Commission’s recommendation on fixing minimum support price for about two dozen commodities on the cost plus 50 percent basis.

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