Pawar wants Vidarbha farmers' loans waived

The man who likes to portray himself as the original reformer among politicians has recommended something which doesn't suit to his image as an advocate of the globalised economy.

The Union Agriculture Minister Sharad Pawar has put his weight behind the demand for a loan waiver to suicide-afflicted six cotton growing districts of Maharashtra.

However, senior officials in the state feel this medicine will cause more havoc than cure the agrarian crisis in the region.

Admitting that the Prime Minister's package of Rs 3,750 crore had not worked, but failed to arrest the suicides of farmers Pawar said, the Centre is considering waiver of all loans of farmers.

He was speaking at the convocation ceremony of Panjabrao Deshmukh Agriculture University at Akola. Akola district has seen one of the highest number of suicides in the region.

"Pawarsheb is a man with good administrative acumen and have always opposed the freebees like free power to farmers or loan waiver as he knows the socio-economic impact these kind of sops can have, so we are surprised by his remarks," said a senior government official.

Speaking to Business Standard, a senior official said, "Once you announce the loan waiver of around Rs 1,400 crore to cotton farmers, there will be similar demands from across the country. And the Centre can't take such decisions for just one region in the one state. So one can imagine the damage the decision can do to our banking system and public finances."

More importantly, it will send a wrong signal across the farming community and break their habit of repayment. The Centre can give a loan waiver for one year. Can it give next year or year after that, he added.

What is more important is to make credit available through banking channels to farmers at a reasonable rate and in time before the farming season begins.

After we ensured farmer gets loan at 6 per cent and announced further rebate in the interest for timely repayment of the loan, the rate of repayment which used to be around 35 per cent has jumped to 50 per cent, he pointed out.

During fiscal 2006-07, farmers in Vidarbha were given around loan of Rs 2,000 crore and over Rs 1,000 crore of loan was repaid by the farmers. Had we included the commercial banks as well as the district co-operative banks in the prime minister's package, the repayments would have gone up to Rs 1,500 crore to Rs 1,600 crore, he pointed out.

Meanwhile president of Vidarbha Janandolan Samiti (VJS) which is fighting to bring the farmers suicide issue to forefront Kishore Tiwari has expressed satisfaction over Pawar's announcement as Samitis one major demand has been accepted by the government.

However, he pointed out that this is a temporary measure, and the Centre must have a mechanism in place to give remunerative prices to farmers of their yield, he demanded.