New Delhi, June 8: Till the protests of farmers in Maharashtra and neighbouring Madhya Pradesh were restricted to shouting slogans and throwing milk and vegetables on the roads, authorities were not taking the issue seriously.
However, after the farmers turned violent, especially in MP on Tuesday, which allegedly led to the police firing and killing of six farmers in Mandsaur, politics over agricultural crisis has taken the centre stage.
The protesting farmers in both the states were mainly demanding waiver of loans and better prices for their produce, to name a few.
Here we would like to focus on farm loan waiver. The issue got national attention especially after the newly-elected BJP government in Uttar Pradesh announced Rs 36,000 crore loan relief for farmers in April.
Chief Minister Yogi Adityanath's announcement was in line with the poll promise made by Prime Narendra Modi, who aggressively campaigned in the state during the election season. It was PM Modi who in several of his campaign meetings promised loan waiver for the distressed farmers.
The decision by the UP government was hailed by many, including Congress Vice President Rahul Gandhi. Strangely, Maharashtra's CM Devendra Fadnavis, another strong BJP leader of the country, decided to take a totally different position regarding farm loan waiver.
Fadnavis said farm loan waiver cannot be a permanent solution to help farmers get free from the burden of debts.
"Any crop loan waiver is not a lasting solution. It helps farmers get rid of debt but doesn't increase his repaying capacity when he goes for his next crop loan. Instead of a one-time crop loan waiver, which will certainly give us political mileage, our policies are to free farmers from the vicious cycle of debt," Fadnavis said, while interacting with farmers on the programme, Mee Mukhyamantri Boltoy (I am the Chief Minister speaking).
The crisis in farming sector in Maharashtra is worst in the country with highest numbers of suicides recorded in the state in the last few years. The data compiled by the relief and rehabilitation department in the state led by senior BJP leader Chandrakant Patil said that 639 farmers committed suicide between January 1 and March 31, 2017.
Fadnavis reluctance to provide loan waiver for the distressed farmers of the state was definitely bad politics, but good economics. However, as cry for loan waiver echoed from Tamil Nadu to Madhya Pradesh and protest of the Maharashtra farmers intensified, Fandnavis too announced Rs 30,000 crore loan relief for the state farmers.
However, the farming community was not happy with the 'gift' and they decided to continue with their agitation.
While in Maharashtra the farmers, fortunately, did not resort to violence till now, but in MP protests suddenly took a violent turn and lives of six farmers were lost. The tragedy in MP reflects the great agrarian crisis that the country is currently facing which the Modi government has failed to understand.
For the time being, state government after state government, might dole out farm loan waiver to stop violent protests and save their vote banks. But how long such sops would help farmers when the very foundation of the farming sector looks shaky?
Moreover, experts warn states which decide to provide loan relief of such massive amount would soon have to face financial crisis.
According to a PTI report in February, every citizen of MP bore a 'debt' of Rs 13,853 as the state government had a liability of Rs 1.11 lakh crore at the beginning of current fiscal (2016-17). "The debt of the state government increased to Rs 1,11,101.10 crore in March last year from Rs 77,413 crore in March 2014. So the average debt of every citizen of Madhya Pradesh was Rs 13,853 as of March 31, 2016," the report quoted state finance minister Jayant Malaiya as saying.
Similarly, Maharashtra has a budget of Rs 2.57 lakh crore, of which committed and essential expenditure is Rs 1.77 lakh crore, as per government data. On the other hand, the state's public debt is set to top the Rs 4 lakh crore mark by March 2018, which will mean the government will have to spend a staggering Rs 31,027 crore from its spend plan for 2017-18 to service the debt, The Indian Express reported in March.
Thus PM Modi and CM Adityanath set a bad example by giving sops to farmers in UP without thinking about its future consequences. Farm loan waiver might help the saffron party to win elections after elections, but the financial burden of it would lead to the collapse of the country's economy.
To avoid such a breakdown, the Modi government needs to strengthen the farming sector by introducing reforms including increasing profit margin paid to farmers instead of giving it away to sly middlemen.