Why farmers in Punjab are unhappy despite loan waiver, cash in hand

The issue of agricultural distress should be approached as a long-term project and should not be viewed through the prism of short-term electoral gains

Representative photo: Aparna Pallavi/CSE

Agricultural distress and farmer unrest continues in Punjab unabated. This is despite the fact that the state government headed by Captain Amarinder Singh claims to have disbursed loan waivers of Rs 4,736 crore, and that Prime Minister Narendra Modi has ordered the Union government to transfer the first disbursement of Rs 6,000 annual financial aid to farmers as announced in the 2019 interim budget.

The debatable question that arises is why the unrest continues despite these interventions. Experts point out that farmers have been deceived regarding what was promised to them and what is delivered. They also point out that while debt forgiveness can be firefighting equipment, the factors responsible for the debt trap remain where they were.

Earlier this week, thousands of farmers organized a demonstration squatting Jandiala railway tracks near Amritsar, severely affecting rail traffic. The railways were forced to cancel 22 trains on March 5, 2019 and 34 on March 6, in addition to diverting several trains via Tarn Taran and Mukerian stations.

Among their demands were a full waiver of the loan, payment of their sugar cane sales rights with 15% interest. The protest was canceled on Wednesday night after the High Court of Punjab and Haryana intervened. The HC is said to have asked the farmers to submit a charter of demands to the government and for a status report to be filed by March 19, 2019, the date of the next hearing.

“We want a full waiver of the loan and not a partial waiver which is in the process of being disbursed. We also want the government to immediately pay the sugarcane royalties with 15% interest, as the High Court has ordered in the past when the pending payment exceeds 14 days. The government should stop the Kurki (property seizure) for farmers unable to repay loans. Banks should not use blank checks taken from farmers when granting them loans as instruments to harass them,” said Satnam Singh Pannu of the Kisan Mazdoor Sangharsh committee which had organized the protest.

The farmers claim that the various sugar mills owe more than Rs 122 crore to the cane growers since the last season.

Debt trap

Professor Gian Singh, an expert in agriculture and farmer-related issues, said farmers in the state felt cheated. “They were promised full loan forgiveness on institutional and non-institutional debt before the election, but what is granted is a partial amount that does not cover all farmers. The waiver is extended to marginal farmers earning up to Rs 2 lakh and small farmers owning small farms with income below Rs 2 lakh. If the latter earns even one rupee above Rs 2 lakh, he is denied the benefit. It’s exclusion,” he said.

Singh pointed to studies which show that except for large farmers with land of 15 acres and more, the rest are not even able to pay the interest on the loans taken. According to him, the total agricultural debt in Punjab is around Rs 1 lakh crore, of which the government is unlikely to waive even 10%.

He further said that farm workers and craftsmen were ignored in the exercise. “While the government claims to help these categories by waiving loans from primary agriculture cooperative service companies, the fact is that the majority of these people are not members of cooperatives,” Singh said.

“Farmers, for their part, don’t know what they want either. While their demands focus on loan waivers, implementing Swaminathan Commission recommendations and paying cane dues, they should actually focus on basics like food, health, education, clean environment and social security,” he added.

Ranjit Singh Ghuman, an expert in agricultural economics at the Center for Rural and Industrial Development Research (CRRID) in Chandigarh, says that while debt cancellation can act as a fire extinguisher, the reasons for agricultural distress persist.

He points out that employment opportunities for the farmer and the agricultural worker have shrunk. For those who belong to the category of farmers and semi-average workers, the problem is very serious because they do not have quality education, no suitable employment opportunities and cannot send their children to higher education. . Since no jobs are created, they are unable to get their children to acquire another skill.

“It’s a vicious circle and with the increase in the land-to-man ratio, disguised unemployment also increases. Various studies show that the lack of higher education is very high among households in rural Punjab,” he said.

Ghuman added that in almost 70% of rural households, there is no registration certificate and this figure rises to 90% in the case of agricultural worker households.

On the issue of non-payment of sugarcane royalties, he said, “This is simply unacceptable. This is a double whammy for the farmers as on the one hand they are denied their payments which can be used to meet their various needs and on the other hand they are forced to take out loans for which they have to pay interest. . The factories continue to collect interest on the payments they withhold. There is no reason for farmers’ payments to be delayed. It is also a fact that the majority of factory owners enjoy political patronage.

It was only on March 2, 2019 that the Punjab Cabinet gave ex post facto approval to disburse Rs 25 per quintal directly into the accounts of sugar cane growers, on a total state agreed price (SAP) of 310 rupees, the remaining 285 rupees per quintal to be paid to them by private sugar mills for the milling year 2018-19.

“This decision aims to ensure the economic viability of the mills and the timely payment of cane to farmers for the 2018-19 milling season, and follows the decision taken in this regard at a meeting held under the presidency. of the Prime Minister on December 5, 2018,” a government spokesperson said.

Experts add that the issue of agricultural distress should be seen as a long-term project and should not be viewed through the prism of short-term electoral gains.

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