Farm loan waivers: Politicians in India are spoiling farmers through populist steps like loan waivers, which can have an adverse impact on the agriculture sector in the long run, Niti Aayog member Professor Ramesh Chand has said. As per an Indian Express report, while delivering Dadabhai Naoraji lecture on the issues of inequality and growth in the agricultural and rural sectors in Bengaluru, he urged states to adopt reforms, including a model contract farming law proposed by Niti Aayog, to raise agricultural growth and reduce inequities.
“Expectations of farmers are becoming more and more unreasonable,” Chand was quoted as saying by the paper. “They want free water, free fertiliser; they want loan waivers, and they want governments to pay 50 percent of the price of the cost of production. No country can meet this kind of things,” he added.
As per Niti Aayog, the farm income per cultivator in the country is estimated to be Rs 9,761. A farmer does not have any other sources of income. About 53 per cent of farmers are below the poverty line, the Niti Aayog member said further and pointed out that “This speaks of a need to take farmers out of agriculture or creating norms for employment for them. Even if we consider the non-farm income of farmers, 22.5 percent of farmers on an average are below the poverty line. In some states it is as high as 45 per cent”.
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He pointed out that the gap in income between agricultural and other sectors increased after 1991 because of uneven reforms.
The non-agriculture sector had begun to step-up after 1991, while agricultural growth stayed at around 2.8 percent. “If you take the correlation between growth rate of the two sectors over a 10-year period, we see that it was 0.9 (percent) till 1991 and a constant…it has now suddenly dropped, and is now 0.4 per cent,’’ the daily further quoted as saying.