How effective will the farmer debt waiver be?

Sat, Mar 1 01:40 AM

New Delhi: Even though the farmer loan waiver benefits only those who have borrowed from government banks, it is certainly welcome.

The waiver has brought smiles on the faces of farmers, a little like a good monsoon does. From Vidharbha to Punjab, hope is in the air.

That cheer in Parliament finds a distant echo in the home of Kamla Bai. Her husband Parsuram committed suicide because he was unable to repay 80,000-rupee bank loan he had taken to grow his cotton crop.

Kamla Bai got a compensation of one lakh rupees, of which 30,000 was given to her as cash, and rest put in a bank. But that too didn't help pay back Parsuram's loan. Harried by bank officials, today Kamla can afford to breathe easy.

"I don't have food. How can I repay my debts?" Kamla Bai asks.

Kamla is one of the four crore farmers who have been granted a complete loan waiver by Chidambaram. Farmers with up to 2 hectares of land qualify for the scheme. The Finance Minister's gift for farmers spreads beyond Vidharbha to drought-hit Bundelkhand.

"It's a great step and will help us. We have been facing drought for years," a Bundlkhand farmer Ram Prasad says.

Farmers in Punjab are also happy at the news of the waiver.

But within the offer to waive off the loan, the fine print holds some problems. The biggest one is that close to 80 per cent farm loans are taken from private moneylenders and not banks.

The economist prime minister describes the debt waiver as "an unorthodox response."

Chidambaram calls it redeeming a "debt of gratitude." But with one-lakh farmers suicides in the last 10 years and counting, the PM's relief package unable stop the deaths, this waiver holds the promise of hope for crores of farmers.

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