Yogi Adityanath's farm loan waiver has not helped potato farmers in Agra belt

The waiver covers small loans--Rs 1 lakh per farmer--while the status of remaining loans where the principal amount exceeds Rs 1 lakh remains unchanged.

Uttar Pradesh Chief Minister Yogi Adityanath announced a loan waiver of Rs 36,359 crore for farmers during his first cabinet meeting on Tuesday.

The loan waiver announced by Yogi Adityanath is the biggest so far by any state, but considering the volume of loans taken by farmers in Uttar Pradesh even this waiver may not benefit each farmer.

In Agra, the scheme will cover nearly 2 lakh farmers with loans worth nearly Rs 1,200 crore being waived. However, a look at the larger picture will tell a different story.


In Agra district, 2.57 lakh farmers owe banks more than Rs 7,000 crore. Of this, the waived amount is Rs 1,200 crore that includes Rs 250 crore in non-performing assets (NPA).

The waiver covers small loans--Rs 1 lakh per farmer--while the status of remaining loans where the principal amount exceeds Rs 1 lakh remains unchanged.

In the run up to the Assembly election in Uttar Pradesh, the BJP had promised in its manifesto that small and landless farmers will get loan waivers, which effectively means that farmers who raise their crop on 1-2 hectare land will benefit from the scheme.

Potato farmers had taken bank loan at Rs 1.5 lakh per hectare while for wheat farmers it was Rs 60,000 per hectare.

In Agra district, the number of potato farmers is way more than farmers who grow wheat. And, under the farm loan waiver scheme, it is the farmers growing wheat who have largely benefitted. On the other hand, potato farmers, who have been ruled out of the scheme, continue to face the crisis.


Yogi Adityanath government's waiver has not been able to change the plight of farmers in Agra where input costs have increased three times in last decade while production has gone down by 30 per cent.

As a result, village youth are migrating to cities and selling off their land to real estate developers, causing a sharp drop in the cultivable land in the region.

In the potato belt alone, the production has dropped from 40-50 quintals per bigha to 30-35 quintals per bigha. Wheat production too has gone down from 6 quintals to 4 quintals per bigha.


According to officials, banks have witnessed a five-fold increase in NPAs. Since October last year, farmers have stopped paying loan instalments in the hope of getting a loan waiver.

A senior bank official criticised Yogi Adityanath's decision and said it will increase the practice of farmers defaulting on their loan in the hope that the government will waive their loans.

Bank Officers Association President V K Goyal said farmer loans have been waived by the state government, but the loan amount will be paid back to the banks by the government. Banks need not worry, he said.

He, although, asked the Yogi Adityanath government to look into parallel financial networks run by private financiers which offer loans to farmers at high interest rates. If this network can be controlled, the reach of welfare schemes can be wider, he said.


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