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Tamil Nadu: Jaya's crop loan waiver small relief for stressed farmers

The government will be writing off loans to the tune of Rs 5780 crore.

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When Jayalalithaa was sworn in on Monday as the Chief Minister of Tamil Nadu, all the farmers in the state were looking forward to the promises she made to them in the run up to the elections. And she did not disappoint them. One of her first signatures as CM was the loan waiver of farmers.

The increasing farmer suicides and harassment of farmers by banks across the state due to stressed agricultural loans, prompted the AIADMK government to include the farm loan waiver in its manifesto. But the government will be waiving off only the loans taken by farmers through cooperative banks. It is estimated that the government will be writing off Rs 5780 crore. Though the farmers welcome the move by the government, the loans taken by them through cooperative banks constitute only 22 percentage of the total loans. The remaining loans are with the nationalized banks.

Earlier in March this year, a video of a farmer in Thanjavur district being beaten by bank officials over non-repayment of dues went viral. This invited extensive criticism from all the political parties. In another incident in the same month, a farmer in Ariyalur committed suicide after his tractor was seized by bank officials. In the two cases, the loans had been taken from a nationalized bank and a private bank. 

With the approaching elections, all political parties started talking about waiving off farmer loans, each trying to gain ground with farmers. All the party manifestos carried loan waivers as their primary agenda to attract farmers across the central region, referred to as the rice bowl of Tamil Nadu. In a year alone, at least 70,000 acres during Kuruvai and over a lakh acres are cultivated for Samba in the delta districts of Thanjavur, Tiruvarur, Nagapattinam, which is the prime cultivation season of Tamil Nadu. With crop failures, farmers were forced to borrow money. In 2008, a drought-like situation had caused a lot of problems for the farmers while in 2015, it was the floods across Tamil Nadu that drowned all the crops. The Kuruvai cultivation has been coming down in recent years due to the decrease in flow of water in the River Cauvery . 

But farmers like Keerthichozhan S in Tiruvarur, who repay their loans regularly, say that this loan waiver sets a bad example. He feels that certain farmers will begin to borrow heavily and wait for the next government to waive them off, putting the genuine farmer in trouble. He also states that when nationalized banks are ordered to clear their Non-Performing Assets, they are left with no choice but to come knocking on the doors of farmers.

Meanwhile, V Rajaram, vice president of Cauvery Delta Farmers' Welfare Association, welcomed the move of the government and said that numerous small farmers owning less than five acres will benefit by this loan waiver. He further added that agriculture remunerative price should be implemented for the farmers as recommended by MS Swaminathan. In 2006, Dr Swaminathan had headed the National Commission on Farmers and  listed out recommendations to save farmers from such calamities, but no action has been taken on it, lament farmers. V Rajaram added, “Farming has become non-remunerative with input costs going up and output returns becoming unfavourable.”

When the DMK government assumed power in 2006, it had waived farmers' co-operative loans to the tune of Rs 7,000 crore and since then there have been constant talks of waiver by every government that comes to power. More than co-operative banks, farmers fall prey to the nationalized banks due to the speedy approval process and the easy access to the officials concerned. And their problems begin to mount when the crops fail and debts begin to pile up.

An advocate at the Madurai Bench of the Madras High Court said, “During every Lok Adalat, agriculture loans and tractor loans are the maximum number of cases. In most of these cases, the banks are advised only to collect the loan amount released and not the interest.” The banks agree to this as well.

Representatives from the farmer community have appreciated Jayalaithaa’s move of loan waiver but they feel it excludes all the large farmers who are also affected by weather conditions as much as the small farmer. K Rajendran, Secretary of Consortium of Indian Farmers’ Association has stated that they want the government to look at the plight of large farmers as well. Most of the delta farmers suggest that several subsidies are being rolled out for the consumers in the state, however there needs to be a specific agenda for farmers that needs to be brought out in consultation with the community by the government. This they feel would encourage farming in the state and make it more successful. 

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