Farmers loan trap

Farmers committing suicide is causing a political upheaval in many states of the country. Political parties across the spectrum are trying to cash in on the misery of the poor farmer. Do the politicians really care for this hard working community who put food on our plates? Their gullibility is encashed by the politicians for garnering votes.

Tenant farmers are those who cultivate crops by taking land on lease, most of them are economically and socially backward and crop loss will be devastating for their families. Over the years I have seen the struggle the tenant farmers go through to make money on the land they rent. There are too many factors that need to come together to help the tenant farmer make money. Weather, Water, Cost of seeds, Cost of fertilizers, Availability of seeds and fertilizers on time, Cost of labor and machinery, interest rate charged by MFIs or worse the local money lender etc are some of the variables that need to be favorable for the farmer to make a decent return/acre. Last year as a good year with everything falling in place, this year it is excessive rain that is causing the problems. Next year it could be fewer rains that will pain the poor farmer.

In a good year these farmers at best make even. Considering the typical cycle for good farming years is say once in 3/4 years these folks are always behind the curve in terms of getting rid of loans etc. Hence they resort to the extreme.
Government schemes are of no help either, for example data shows that Rs 11,353 crores were waived off by the centre under the farm loan waiver scheme out of which only 130 crore loans of tenant farmers benefitted. This is truly unbelievable and disturbing. The wells of farmers are getting full benefits of such schemes.

Most of the tenant farmers get into the vicious cycle of loans and more borrowings not only for farming purposes but for other purposes like child education, family responsibilities, health care etc. There are many reasons for this financial mess, the local money lenders squeeze their blood out charging interest rates up to 40%, MFIs are no better charging upwards of 25%, government banks do not give loans due to lack of identity and other proofs. Hence most of the time they are catching up with no hope of getting debt free.

The other aspect is there are too many of these farmers trying to cultivate a small land holding which is not viable. The productivity from each acre has to double from the current numbers if they have to make a decent profit (for e.g.: Paddy for a bumper crop one can expect 34-38 bags/acre in a fertile area, even at this rate the tenant farmer may just be breaking even, it has to go to 50 bags/acre for the tenant farmer to make a decent profit). Unscientific cultivation practices are some of the reasons for poor productivity; this is a whole different story.

There are many steps that the government need to take to help the tenant farmers (1) Regulate the tenancy acts to make it win win for both the land owner and farmer (in a bad year both parties should share the pain) (2) Loan trap – introduce regulation on interest rates charged by local money lenders, enable penetration of MFIs (don’t kill this industry, regulate it) they are better than the local money lenders (3) Retrain the young farmers in allied skills and help them get jobs in urban areas, we don’t need so many young people performing farming duties with such low productivity, we need to introduce automation in farming (4) Increase financial inclusivity, get all the farmers open bank accounts ( use the help of UID authority) and transfer cash to their accounts as part of govt grants. (5) Let the PSUs give cheaper loans to help the tenant farmers purchase lands.

I am sure someone in the government has better ideas than the above but I guess is stuck in the maze of policies, red tape and lethargy.Meanwhile the suicides continue to create havoc in the farming community.

Pesky frisking

Every time an Indian Diplomat or a politician is frisked or asked to go through the security check at an US airport or else where it is an issue and we call for apologies etc. The standard American response is we regret but will adhere to the security process next time too. Diplomatic niceties can wait but security is important for the Americans. I agree that TSA agents at times get carried away and can be insensitive but in general they go by the book.

If we are so offended do what Brazil does to American citizens, get the Americans finger printed and subject them to your procedures. There is a problem in doing this, we ourselves do not take our rule books seriously, our neta’s and babu’s are used to exclusive privileges in airports and other public institutions and feel insulted to stand in queue for their turn like others do. Feudal mentality reigns amongst our ruling class.

We should take the spirit behind the security procedures at the US airport’s and have much more robust procedures at our airports since our airports are more vulnerable. Do not keep sulking on small matters and keep protesting, let us elevate our discipline in public life and show the world we mean business.

First step towards achieving this – introduce a legislation to stop our MLA’s and MP’s going around our cities and towns with their cronies like robin hood’s, ordinary citizens suffer while they have a free right of away. Let us not preach rules to others while we never follow one.

Corruption Mania

Enough has been said about the Nira Radia tapes. What is baffling is the “pro-active” media, both print and Television going slow on exposing the involvement of Journalists in the 2G scam. It is very interesting to hear Vir Sanghvi talking to Nira Radia and helping her to fix the message for Mukesh. Barkha dutt’s self righteous messaging on TV shows also falls apart. I challenge the TV channels to play the recordings to show that they really stand for the “ Truth” not only the truth they are comfortable with.

Coming to the 2G scam itself I think successive governments have played around with the policy leading to huge losses to the exchequer. But what A.Raja has done is the mother of all scams. What he has done in broad is galling. It is possible only in India. Impossible to believe that no one in the Govt knew.
The scam / corruption count is around 150k crores (75 2G + 75 CWG). So much work for the CVC to investigate, who himself is under investigation. Totally confusing on how we run the country.

Even more shameful in the Adarsh housing scam, it shows our utter lack of respect for folks who defend the country.