Farmers issue and ways to resolve it from root
Last many years I have been hearing small farmers’ poor financial conditions leading them to distress and suicide as well. Politicians rather than resolving the issues have deliberately kept it alive for decades so as to corner the ruling party and use it as a tool during election for vote bank . Role of parties changes (ruling party becomes oppositions and vice versa) but game continues between politicians . Small farmer issue will remain as it is in next many elections and it will always be exploited by oppositions in every elections to come . Will be resolved only if solved from root
Situation Till now – loans given every now and then , loan waiver demand , loan waived , again fresh loan given …… and cycle continues and will keep continuing ……….. .
Situation Ahead – Small farmers plight will remain or even become worse till not resolved from root .
Lets’ examine the usage of Loans – Given for what ? to create fixed asset ( tractor, pump, generator etc ) or for working capital requirement ( seed , urea etc ) ? . Anyone who is poor , finding to meet his day to day expenses does long term asset creation has any meaning ? Will he use those bank loan money for said purpose or for meeting his day to day survival expenses ? If he is not having enough money to meet his normal living how he will meet asset maintenance expenses ( tractor repair , machine breakdown etc ) so at some stage that asset will be sold in secondary market . Now does it make any sense to give loan for asset creation to such farmers ?
Working capital loan – Most of the operational expenses ( sowing etc ) are either free or highly subsidized still why distress . Money is earned only when the agri products sold but expenses all 365 days . Have they kept their money safely or someone bluffed their ignorance and situation ? Did they use their expenses wisely and in staggered way ? Its obvious for many such type of people that once they get huge chunk they spend more and extravagantly initially only to realise the mistake when shortfall felt.
Cause of financial distress – Not able to pay the loan as earnings were/ are insufficient . So Cause is not loan but earnings .
Analysing the root cause - Why are small farmer poor and becoming poorer and earnings reducing and they are in debt trap , unable to pay loan and under financial strain ?.
They inherited a piece of land from their previous generations . Their forefathers were also farmers . earlier generations were having many children. land kept getting divided among all sons generation by generations . So each one getting a smaller piece of land for farming . Many might have sold some part of their land for medical reasons , educating children etc. . So the now net plaughble land has reduced further . ( LAND HOLDING REDUCED ) What about the size of each family ? Following similar trend as of earlier generations . The foodgrain outputs on that land will be of some limit and value . But cost of living has increased like anything due to nos to be fed , expenses for better lifestyle . Its very obvious that the earnings of such farmers are unsustainable to meet their life expenses . Even all form of free and highly subsidized inputs ( electricity, water , seeds , urea , crop insurance etc ) not able
to resolve the woes . So waiving farm loan will resolve his problem ?. NO and NEVER .
Solution –(1) ensure stable sustainable earning to meet his life and family expenses .
(2) Don’t burden him on debt through unnecessary loan if he is not able to meet the interest payout issue .
Execution of Solution –
• Average land productivity , produced farm product value and minimum sustenance expenses has to be determined for each such poor farmer land holding size wise . Gaps known i.e who can sustain their living from current productivity and who can not .
• Any fresh farm loans to such entities will keep causing distress to them so need to examine that should they be given loan now or till they reach a stage where can service their loan .
• Like Mutual Fund , pooled land farming concept has to be evolved . Like MF the real owners are investors but managed in most professional way same concept and legal entity has to be created . e.g lakhs of such farmers pool their land and it becomes say 50000 hectare of plaughble land managed ( farming ) by an legal expert entity.
• Ownership of that land legally will remain with that small farmers but as its sublet given to that legal entity only for farming . Each small farmer will be an owner of land chunk of land in proportionate basis .
• All cost , fixed and operational to be borne by that legal entity along with Government support and monitoring .
• Fixed cost inputs and regular expenses to be borne by that legally structured entity like tractors, seeds , electricity , crop insurance , store house etc . Government financial and other support providing on lease, rent etc .
• Each small farmers will have to act as compulsory as labourer and will be getting minimum monthly salary for monthly livelihood sustenance of their family . labour cost will be given to the real owner , he will work with full dedication as its his and it is also under his watchful eyes .
• Once produced , Agri product sold by legal entity as per pricing guidelines laid down by Government in organised and structured way in most transparent manner. The individual small farmer does not carry any burden of selling and marketing.
• Information of how much produced and the share of per farmer from the sale proceeds/ gain in proportion to his farm holding shared with them in most transparent way .
• Such farmers should also be encouraged and educated on regular saving , investment in right manner so that at some stage they are financially capable to do farming on their own , earn better living and grow as well.
