Farm Loan Waiver not the Long Term Solution to Agrarian Crisis: Dilip Ray

ONI Bureau: Former Union Minister Dilip Ray, who recently resigned from the Odisha Assembly as well as the BJP, has made it stand clear on the issue of farm loan waiver and agrarian crisis in the state. Ray took to Facebook to post his views. Here we go:

“The Issue of Farm Loan Waiver has again taken the centre stage of political rhetoric. Farmers are pushed into a state of debt for reasons that are largely not in their control such as erratic monsoon and crop failures and this happens to be one of the key reasons for agrarian distress and also the cause behind many farmer suicides.

In the light of this fact, farm loan waiver is a much-needed intervention for the agricultural sector- the backbone of our economy. But, however, this can never be the panacea to the crisis that faces the agricultural sector and creating an impression on this line should be avoided.

A large chunk of farmers still doesn’t have access to Institutional Credit with various surveys indicating the figure to be as high as 40%. It implies that, in effect, 40% of them will still be excluded from the benefits extended through farm loan waivers. This fact has also been underscored in the CAG report which has pointed out that such schemes are prone to serious exclusion and inclusion errors. Moreover, such schemes do not cover agricultural labourers and other more economically vulnerable groups.

Loan waivers may provide short-term relief to the farmers but the long-term effectiveness of such a measure is questionable. The agricultural sector faces problems that are structural in nature and to address them, structural reforms have to be initiated. Raising agricultural productivity, making farming remunerative for farmers and enhancing their access to non-farm sources of Income is the only way out to deal with the never-ending agrarian distress.”