This year the farming community was indirectly inflated with money, firstly with MSP hike and then by the loan waiving epidemic.
In the current un-constructive competition, between the political parties, parties seem to have picked up their vote bank and are religiously focusing on serving their interests without actually retorting the agenda of “Doubling Farmer’s income”. Not just it harms the economy but also affects the psyche of farmers, due to which the farmer enters into expectation bubble, that the loans might be waived again which then becomes vicious cycle. As per the think tank, NITI AYOG not more than 20% of the needy farmers are helped with such efforts. Neither it blankets the problem of a wide fraction of farmers nor does it lay out a better future plan. Until such waivers are properly and prudently tossed with other solutions, there were will be only series of farm waivers but no improvement at the farms.
It has not been a clandestine issue where a farmer is granted loan for farms, but the money is invested in other important activities by her, in the absence of other financial helps. Such defaults are also counted in the backlogs. It is imperative to address the real ground problems, disassociating them with the only incapability of paying back the loans. There would not be any need of waiving loans, if at the first place proper plan is laid out by the think tanks of the country. Associating insurance schemes with crop failure and climate change challenges intervened with technical and market support from seed treatment till harvesting could emancipate the living conditions, and hence farmer’s confidence in better returns. If then needed, loan waiving could be a supplement. But this tool is absolutely mis-handled.
Likewise, Talking of MSP, pushing the prices of the commodities north, without any planning or estimated harvests might not really help to support the farmers in the long run. Various governments and policy makers have supported this idea and Europe decoupled “assistance from prices” in 2003. Though various schemes and support mechanisms run in these countries but unattached to the price factor. The Wool Crisis of Australia in 1990s gives us a brilliant example to understand the picture. The wool industry in Australia was suffering with demeaning prices in the 1990s and hence the govt. tried to help the rearers by inflating the prices. The actual market price was raised quite high and as a result, most of the farmers reared sheep and hence accumulated piles of wool, which was supposed to fetch reasonably high prices for the farmers. High prices forced customers to switch to alternatives of wool and with time the stockpiles augmented. The farmers’ conditions were grim, even when the prices in market was quite high. It was long before the govt. retracted from the scheme, conspicuously because it had invested huge in the scheme.
The unrests and uprisings are not calling for money but for better environment which could fetch the farmers good returns. The investment should be poured in to make the markets stronger, cold storages available, mechanisation and transportation for agri goods cheaper, glib availability of quality seeds and other inputs, guaranteed insurances, timely and genuine check on soil quality, proper assistance and guidance of use of chemicals, ability to bargain for their produce, proper connectivity with the markets, firm ability to contact the market with out any shrewd middlemen and many more such points to state.
Inflating prices can be a sedative but not a panacea. Farmers all over the world, needs hospitable environment to trade their goods and not pre- conceived prices which does not resonate with the market. Production is no more in dire straits but the market still is. Post harvest losses and un-wise return/price value for the farmer’s commodity adds up to majority of farmer’s problems. In this time, when most of the farmers are wrenched with the issues of errant rainfalls, floods, droughts, invasive pest attacks to mention a few, the govt. should rather offer them a hand as a security which can assure them, their hard work would not go in vain.
Give farmers Confidence not Cash.