Loan waivers will give temporary relief to farmers but will not permanently fix problems that the agriculture sector faces. They can help beneficiary farmers make a fresh start but will not help farmer households double their real income by 2022, the year India completes 75 years as an independent nation.
Minimum support price (MSP) for procurement is a good signalling tool but it is no good when procurement machinery is inadequate and smaller farmers have little idea of either the support price or the machinery. And, indeed that is the case as National Sample Survey Organisation found in its 70th Round of surveys conducted between July 2012 and June 2013. Most farmers, except for those growing paddy, wheat and sugarcane, were unaware of the MSP announced by the government as well as the procurement process.
It also does not help if the government, under pressure to keep food prices in check, resorts to ad hoc measures such as imports and clamps down on exports. Interventions in the agri-produce market to curb food prices hurts small farmers as much as large farmers. This is because small farmers, defined as those owning one or two hectares, get as much as 57 per cent of the income from cultivation. Their total income from various economic activities, net of the expenses, was estimated at ₹7,348, NSSO reports estimate.
Encouraging farmers to supplement their income through animal husbandry is a sensible decision, but placing too many restrictions on trade in animals is counterproductive. Curbs on animal trade and cow vigilantism hurts the poorest farm households, particularly those with less than a hectare of land. Those with less than 0.01 hectare of land earn more than a quarter of their income from animal husbandry.
Thus, it is critical that the government weigh the impact of every decision it takes on farmers, rather than resort to fire-fighting when a crisis erupts.
Senior Deputy Editor