Panel asks govt to up public expenditure on agriculture

Terming the burden of debt as the most acute cause of the agrarian distress in Andhra Pradesh, the Commission on Farmers' Welfare led by Jayati Ghosh, professor at Jawaharlal Nehru University, advised the state government to see to it that the accumulated interest on any farm loan did not exceed the principal.

Ghosh said that any interest amount over and above the amount borrowed should be written off automatically by the lending institutions.

The commission, which was constituted by the Andhra Pradesh government a couple of months ago, in its report submitted to chief minister Y S Rajasekhara Reddy on Saturday, has advised the state to approach the Reserve Bank of India (RBI), Nabard and the public insurance companies with requests such as no interest should be charged for the period of current rescheduling, interest waiver in areas declared as drought affected, and 6 per cent interest cap on all farm loans.

It also advised the state government to continue the current scheme of providing 50 per cent subsidy on premium for crop insurance to the small and medium farmers.

On a broader scale, the commission has recommended the government to bring all the cultivators under the ambit of institutional credit, including tenant farmers, shift policies to focus on dryland farming, encourage cheaper and more sustainable input use, protect farmers from high volatility in output prices with an emphasis on rural economic diversification, to more value-added activities and non-agricultural activities.

Significantly, the commission advised the state to demand from the central government to bring in a system of variable tariffs and if necessary quantitative restrictions on agricultural commodities in view of increased influence of global market on the domestic price fluctuations.

Advising the government to increase the overall public expenditure on agriculture, which has seen a steep downslide in the past decade, the commission suggested that the expenditure on various support measures in agriculture and allied sectors should reach 5 per cent of the GSDP (Gross State Domestic Product) in the next budget.

Of all the suggestions on long-term measures, the report took a more serious view of inequalities among areas and farmers in access to irrigation, in an endorsement of the state government's ambitious plans for construction of irrigation projects and the ongoing free power scheme, by asking the government to correct spatial inequities in access to irrigation.

Admitting that the causes of the agrarian crises that reflected in the most acute way through farmers' suicides in Andhra Pradesh as complex and manifold, the commission, however, observed that they are dominantly related to the public policy.

Coming down heavily on the previous governments for the present situation, the report said: "The economic strategy of the past decade at both the central and state government levels has systematically reduced the protection afforded to farmers and exposed them to the market volatility and private profiteering without adequate regulation, reduced critical forms of public expenditure, destroyed important public institutions and did not adequately generate other non-agricultural economic activities."

Advising specific measures in each of the related areas of land, credit, water, research and extension, input provision, market prices among others, Ghosh's report has also recommended that the government bring in an Employment Guarantee Act, ensuring a minimum of 100 days of employment at minimum wages for the rural workers.

Terming the complexity of land relations in Andhra Pradesh as a significant contributor to the problems facing the farmers, the commission suggested that the government should take up as an immediate priority to record and register actual cultivators including tenants and women cultivators besides distribution of land.

Maintaining that the effectiveness of the commissions' recommendations depend essentially upon the political will to translate them into government policy and on the quality, accountability and responsiveness of public delivery systems, the commission recommended the government to ensure a much greater degree of public participation and strengthening the Panchayatraj system with greater powers.