De-stressing the distressed farmer: Loan waiver or … ?

Forums AgriTech News(Agri) De-stressing the distressed farmer: Loan waiver or … ?

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      Govt can use waivers where warranted, but must also initiate reforms and push investments, with the pvt sector playing an anchor

      The Dream Scenes contain many reforms and structural changes in agriculture, all of which have been advocated for nearly two decades. A bountiful crop meant access to real-time and hyper-local weather forecasts, available on the farmer’s mobile phone, as well as to personalised knowledge relevant to his soil and resilient to unpredictable crop-growing conditions. Selling directly meant sound market linkages riding on the reform in the APMC Act, allowing multiple buyers competing for his produce without him going to the mandi. They contain a simple insurance scheme that gave money when the crop failed, or the ability to manage price risk by selling futures/buying options on the commodity exchange via the FPO (farmer producer organisation), of which he is a member. They contain incentives through interest rate subvention for timely repayment of loan.

      Despite this two-decade-old advocacy, such scenes still remain dreams for a majority of our farmers. Why does it have to be so, when everyone is concerned and those who matter know the solution? “It’s politics, stupid,” says my friend, mimicking the 1992 Clinton presidential campaign slogan: “The economy, stupid.”

      Since 2008, loan waivers have almost never failed the promising political party in winning an election. Why will then a winning formula be given up by the political class? This is not to say that there’s no place for loan waivers. There are regions in the country that suffered from poor weather in 2014 and 2015, and crashing prices of crops in 2016 and 2017. These are fit cases for waiver, while the derivative markets evolve and the insurance scheme gets refined.


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