Farm loan waivers not easy to implement

The clamour for farm loan waivers does not seem to be abating, even if it has been pushed to the back pages for now by news around the goods and services tax transition. We continue to believe this is a structural issue, with rising agricultural productivity (helped by roads, phones and electricity) pushing up supply, whereas food demand growth has weakened due to falling per capita calorie demand and slowing population growth. Food processing and exports can help release some pressure, but these may take time to grow.

While political forces may have precipitated the issue around loan waivers, the stress