The Hindu : National : With loan waiver, substantial line of credit has opened up: Pawar

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With loan waiver, substantial line of credit has opened up: Pawar

Special Correspondent

Says there are many reasons for farm suicides other than indebtedness

Sharad Pawar

MUMBAI: Upbeat after the loan waiver for farmers, Union Agriculture Minister Sharad Pawar on Saturday said there was no hurry to hold general elections. Denying that the loan waiver was meant as a pre-poll move, he told reporters, “Let us stay in power for another 14 to 15 months.”

‘Vidarbha stands to gain’

At a packed press conference at a city hotel, Mr. Pawar, who was assailed with questions on the “historic and unprecedented” waiver of farm loans for small and marginal farmers, said it was not correct to say that the suicide hit Vidarbha region would not benefit from the waiver. He said he did not have information on small and marginal farmers in each district but he was sure that Vidarbha stood to gain.

In response to a question, he said he could not predict whether suicides would come down as a result of this waiver. There were many reasons for farm suicides other than indebtedness.

In the country as a whole, only 40 per cent of farmers were eligible for credit from various banks as the rest were defaulters due to various reasons.

With the waiver, he said, a substantial line of credit, which was choked up till now for farmers, had opened up and they could approach banks for fresh loans.

Consumption loans

Since the farmer was not getting any loans for consumption, often crop loans were being diverted for emergencies, health or marriages. He said some new system which will give farmers consumption loans would have to be worked out in the near future and implemented.

Since private moneylenders formed a major source of loans for farmers, Mr Pawar said there was no need to repay loans owed to moneylenders who were not licensed. He would be writing to State governments to ensure protection for farmers who were in debt to unlicensed money lenders and set up machinery for that.

He was angry with questions from reporters on whether the rich Western Maharashtra region would benefit as a result of this waiver. He said this decision was taken for the whole country and he refused to answer questions on such parochial lines. He clarified that in Maharashtra alone 75.42 per cent of small and marginal farmers would benefit. In States like Kerala which had 98.5 per cent small and marginal farmers, West Bengal with 98 per cent, Uttar Pradesh with 91.13 per cent and Bihar with 93.92 per cent, there would be major benefits.

In India as a whole there were 81.89 per cent small and marginal farmers who would be eligible for the loan waiver. While the total loan waiver package including the one time settlement would cost the government Rs 60,000 crore, he said the figure was likely to go up to Rs 65,000 crore as the one time settlement figure was yet to be finalised.

Referring to the Rs 60,000 crore, he said this included loans which were rescheduled from one to five years, for instance, in the Vidarbha package announced by Prime Minister Manmohan Singh. He said this year, 2007-2008, the government would have to deposit Rs 40,317 crore in various banks. After that for the next three years, the figure was Rs 8,800 crore each for 2008-09 and 2009-10 and the last instalment would be Rs 2,400 crores in 2010-11.

He said he would not be able to state the source of the funds, since he was not in charge of the finance department. Asked about remunerative prices for farm produce, he said already the prices farm produce, specially for cotton, wheat, rice, soyabean and sugarcane, were at an all time high. Referring to the Price Stabilisation Fund recommended by Dr. M.S. Swaminathan, he said the government was studying it and a final decision was yet to be taken.

While the loan waiver was one aspect, long term planning including providing irrigation for rainfed areas and giving priority to interstate projects and pending ones had to be taken up.

In Vidarbha irrigation projects would be speeded up and completed in three years. He said the agriculture sector was just starting to be liberalised and amendments in the law had resulted in farmers getting higher prices for their produce.

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