National farm loan waiver policy: Odisha CM Naveen Patnaik misses the wood for the trees, seeks cure for a symptom

In hindsight, what the Indian Constitution makers perhaps were remiss is sowing the seeds of agrarian distress by putting agriculture in the state list because it has resulted in agriculture not getting the pride of place in the pecking order of development and priority and the states viewing it through the prism of politics rather than economics. The Odisha Chief Minister Naveen Patnaik’s exhortation to the central government to frame a national policy on farm loan waiver while being seemingly pertinent misses the wood for trees. Farm loan waiver does not merit a national policy as much as the underlying facets of agrarian economy do. Cure must be for a disease and not for its symptom even if it is the most manifest. Ownership and size of land, quality of seeds, irrigation, crop insurance, availability of loans, marketing of agricultural produce including state procurement all have a bearing on the agrarian economy. Therefore, when all these issues are addressed comprehensively, perhaps there won’t be any need for a national farm loan waiver policy as sustained viability of farming would render defaults a thing of past. At best it might be required as a one-time measure on the condition that states first agree to a broad national policy on agriculture which possibly might require agriculture being transferred from state to the Union list. A Goods and Services Tax (GST)-type consensus and constitutional amendment is what is required to address the agrarian crisis.

Patnaik’s fixation with farm loan reflects the states’ tendency to pass the buck for its travails to the center. Patnaik seems to believe rather naively that if a farm loan waiver policy is in place, it would solve all agrarian problems playing the country. He is wrong. Unless the underlying causes are addressed squarely, agrarian distress would raise its head continually. Of course his limited point is well taken—there should be a national consensus on farm loan waivers so that it does not become a state-specific election issue whenever a state goes to polls.

It is now widely acknowledged that agriculture in India is not run on business lines but more for self-sustenance. There are of course big _kulak_s, the landowning gentry, and pretenders who embrace agriculture to launder their black money. What we need is large scale farming on scientific lines which is possible only if corporate farming becomes the norm. Producers’ cooperative has been in the statute book, with AMUL serving as the exemplar but would call for greater thrust and spade work to get started vis-à-vis corporate farming. But both have the potential to make agriculture truly a business run on scientific lines and on a large scale. [caption id=“attachment_4508331” align=“alignleft” width=“380”]  File photo of Naveen Patnaik, Chief Minister of Odisha. PTI[/caption] As it is restaurant chains like McDonald encourage contract farming which is by and large lapped up by kulaks that grow tomatoes and potatoes for a predetermined price on a long-term basis thus assuring them of regular off take with quality seeds becoming available. This will not do. What we need is the McDonalds and Pepsis of the world entering farming directly. Wal-Mart and other retail chains too should be encouraged to invest substantially in farming. Skeptics might bristle with a query—what would happen to the small farmer India teems with? Well, they should all lease their lands to the corporates for a decent rent besides being assured of a job and salary in the farm they work. Stock ownership can also make them partners in progress besides getting them dividend in addition to rent and salary. Big organisations can manage their purchases and sales better besides managing their risks too far better. The Green Revolution was about seeds and cropping pattern. What we now require at this juncture is a roots and branches reforms on agriculture that has been left to the tender mercies of nature and elements for too long. The sector on which almost 60 percent of our population is dependent cannot be left contributing just 14.8 percent (as of FY18) of the gross domestic product (GDP). This is the root cause of the agrarian distress and its most virulent manifestation—regular clamor for farm loan waiver and farmer suicide. (The writer is a senior columnist and tweets @smurlidharan)