The firm stand of Finance Minister Arun Jaitley that the burden of the farm loan waiver is on the States is debatable. While successive loan waiver schemes have rewarded only the defaulters and not given incentives for prompt repayment, a scheme to give solace to farmers in case of genuine distress such as drought, natural calamities and unprofitable pricing is necessary.

That said, State governments are offering loan waivers not to help farmers but with an eye on the vote bank.

The failures in industry and service sectors are socialised, with lakh crores of rupees being written off by public sector banks, and the benefiting corporates find new avenues to carry on alternative businesses.

The farmers, though, are solely dependent on their land and migrate only due to distress. Until the issues in cultivation and marketing are addressed, it is obligatory for a welfare state to support them.

S Veeraraghavan

Coimbatore

Cut the middleman out

The recent agitations by farmers of some States to write off their crop loans may spread to other states also if the Government does not take corrective steps.

What farmers want is a reasonable price for their produce, better marketing facilities, institutional credit at low interest rate, irrigation, quality seeds and fertilisers, procurement during times of market glut and a social safety net at the time of nature calamities. These requirements were highlighted in various committee’s reports but ignored by successive governments.

Middlemen should be avoided at any cost and there should be a direct link between consumers and farmers. The Rytu bazaars in Andhra Pradesh, for instance, allow farmers an allotted place to directly sell their produce to the consumers at the rate decided by them.

The scale of finance announced by the Government for various crops is always low and not based on the actual cost of production, forcing the farmers to depend on local money lenders at high interest rates to meet the difference in of cost of production and thereby incur losses.

Unless the fundamental problems of crop and regional bias of MSP policy, government procurement and access to institutional credit are addressed, a mere increase in the support price or frequent loan waivers despite the RBI’s and banks’ warnings on lack of credit discipline will be of no use.

TSN Rao

Bheemavaram, AP

Demand justified

This refers to the report ‘Demand for farm-loan waivers spreads’ and ‘States that go in for farm-loan waivers should foot the bill, says Jaitley’ (June 13).

The stand of the finance minister on farm loans is not justified since the farm sector offers a significant proportion of the jobs required and reports of youth preferring employment in non-agriculture sectors are points calling for serious consideration. Farming-related problems are mostly related to lack of favourable climatic conditions and the losses could be heavy and beyond financial abilities of farmers.

The States’ financial burden might rise heavily if the waiver is left to them and waivers might remain unfulfilled. The Government should intensify the insurance of farming sectors also.

There is justification in the demand for farm waivers, at least in cases of smaller cases and bearing part of the burden.

TR Anandan

Email

Fall in inflation

It is learnt that inflation fell to 2.8 per cent in May, thanks mainly to the fall in prices of vegetables and pulses. If the prices of some necessary commodities fall in the economy, then consumers must benefit. But one doesn’t see any signs of respite.

Needless to say, the producers cannot be happy over the development. When neither side is happy, what’s happening in the country? The RBI should wake up and activate its quantitative control credit measures (say, lowering the repo rate, bank rate, cash reserve ratio) to increase the aggregate demand in the economy and step up its growth.

S Ramakrishnasayee

Ranipet

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