Vidarbha may not gain from loan waiver

BUDGET 2008-09

RS 60,000-CRORE BONANZA: The waiver won't help indebted farmers in Chhattisgarh either as most of them hold four and five hectares.

The mammoth farm loan waiver of Rs 60,000 crore is unlikely to benefit cotton farmers in Vidarbha and elsewhere as it does not address the fact that dry-land farming attracts far lower loans per acre as irrigated farming.

An acre of unirrigated land is entitled to loans of up to Rs 4,000. The same land which is irrigated attracts loans of up to Rs 50,000.

In other words, the waiver of loans taken for farmers with two hectares (or 5 acres) would not add up to much for a cotton grower who does dry-land farming, since they have to look at other informal means to meet their borrowing needs

In contrast, the per acre loans available for growers of sugarcane, grapes and horticulture crops will benefit hugely.

This difference had been pointed out by the Congress party president from Vidarbha Prabha Tai Rao when she had appealed for a waiver of up to Rs 30,000 for farm loans to Finance Minister P Chidambaram recently.

"While grape and sugarcane growers will get lakhs of rupees waived in one stroke, the cotton and dry-land farmers will barely get Rs 30,000 waived," Vijay Jaywanthia, a farmer-turned-activist and a leading voice from the farm distress zone of Vidarbha.

The waiver won't help indebted farmers in Chhattisgarh which has been reporting farmer suicides because most of them hold four and five hectares (10 to 12.5 acres).

Jaywanthia said the only way this waiver can work in favour of farmers is to waive up to a certain amount, say Rs 50,000 per farmer, or have different waiver limits for dry land and irrigated land farmers.

The farmers of Vidarbha are even demanding that the finance minister should come out with a white paper on the money that will go to different tehsils in each district under the waiver.

This will expose the anomaly that the waiver intentionally or unintentionally is going to benefit the sugarcane belt besides those growing horticultural crops, Jaywanthia added.