Devinder Sharma thinks Uttar Pradesh Chief Minister Yogi Adityanath is on the right track to revive UP agriculture. CHS founder Winin Pereira, who wrote about ‘breaking the cycle of debt and dependency’ might well have agreed with Sharma.
The minister has decided to scrap outstanding loans of small and marginal farmers up to a maximum limit of Rs 1-lakh each and at the same time expand wheat procurement operations. He aims to purchase 80 lakh tonnes of wheat at the minimum support price and 5,000 purchase centres are being set up. Uttar Pradesh is likely to reinvigorate farming by ensuring an assured price to farmers.
The state government will also strike Rs 5,630-crore of bank default, saving 7 lakh farmers from having their assets put up for auction.
Sharma believes that the political courage to write-off such a huge amount, including loans taken from nationalized banks, has to be applauded – but the State Bank of India chairperson Arundhati Bhattacharya has already lamented that farm loan waiver destroys ‘credit discipline’ making farmers habitual defaulters.
“This smacks of double standards”, Sharma comments. The entire farm loan waiver that UP has provided is less than the bad debt of just one big steel company — Jindal Steel & Power, which owes Rs 44,140-crore. Bhushan Steel too has a bad debt of Rs 44,478-crore. These two big industries are among the steel companies, which together are seeking a loan waiver of Rs 1.5 lakh crore.
In another article in the Orissa Post, Sharma quotes, the Chief Economic Advisor Arvind Subramaniam is on record as saying that writing-off of bad loans of the corporate sector makes economic sense. “This is how capitalism works,” he said. ”If this is true”, Sharma adds, “I don’t know why capitalism doesn’t work the same way for farmers”.
There is now pressure on the newly-elected government in Punjab for a farm loan waiver of approximately Rs 36,000-crore. Maharashtra has been demanding Rs 30,500-crore for farm loan write-off. Considering that more than 3.18 lakh farmers have committed suicide across the country in the past 21 years, and roughly 70% of these suicides are related to mounting indebtedness.
Sharma considers that UP’s farm loan waiver will turn out to be a game changer and also expanding the procurement system would transform Indian agriculture. A network of mandis exists in Punjab, Haryana and to some extent in Madhya Pradesh, Maharashtra and Tamil Nadu but every year farmers from western UP carry truckloads of wheat to be sold in the neighbouring border districts of Haryana – ample indication that wheat farmers in UP were not able to sell locally at the support price.
According to the Commission for Agricultural Costs and Prices (CACP) there are more than 7,000 APMC regulated mandis in the country. If markets have to be provided at a radius of 5 kms from every village, India would need 42,000. Such a vast network, if constructed, could prevent distress sales and ensure income security for farmers. If UP takes the lead, it will emerge as a trendsetter and create a new model for agriculture.
An economically attractive agriculture is the first step to stop rural to urban migration. And that’s what Yogi Adityanath has said his aim is – to stop migration from rural areas – and that was a cause near to the heart of CHS’ founder.