Loan waivers have failed the peasantry

The newly formed Congress government in Rajasthan followed in the footsteps of the new governments in MP and Chhattisgarh when it announced farm loan waivers on 18h December. Going into the Assembly elections, the Congress Party had promised that it would waive farm loans in10 days of the party being elected to power in the three states. While Rahul Gandhi is boasting that his Party has kept its word and has taken concrete steps towards alleviating farm distress, Prime Minister Modi called it a ‘political stunt’. However, the BJP had made promises of loan waivers to sugar cane farmers during the campaign for the UP State elections. Similar announcements have been made by Punjab, Karnataka and Maharashtra governments.

Meanwhile, farmers and their organisations are wary of the actual implementation of these announcements, going by their experience across the country. They know that election promises are one thing and actual implementation is another. Their experience shows that any such announcement by these parties of the bourgeoisie, whether loan waivers or MSP or putting cash in the bank accounts of farmers, is not an attempt to address the plight of the farmers but because it suits their narrow party interests at that time.

In every state where loan waivers were announced in the last few years, there has been a huge gap between policy announcements and action. According to reports, in the four states -- Uttar Pradesh, Maharashtra, Karnataka, and Punjab which had announced waivers during the period since April 2017, only 40 per cent of the promised amount had been waived as on 24th December 2018, and just half the targeted beneficiaries had benefited. Several factors have contributed to this.

Firstly, the waivers have been conditional. Pensioners who get more than Rs.15000 per month were to be excluded in Maharashtra. In Punjab and Uttar Pradesh, the waivers were allowed only for small and marginal farmers, who own less than 5 acres, In Punjab waivers totaled less than Rs. 2,000 crore since they were announced in June 2017 amounting to less than even 20 percent of the targeted Rs.10,000 crore. A large section of farmers has been excluded.

Secondly, governments have set a cut-off date when they implement a waiver. For example, the recently formed Madhya Pradesh government announced March 2018 as a cut-off date, completely leaving out the farmers who had taken a loan in April or May for the kharif season.

Further, the eligibility norms for the waivers have been changed many times as in the case of Maharashtra. Initially, the state government had considered the farmer's family as one unit in claiming the waiver. Later, this was changed to include every member who had an outstanding loan. Another change that was announced was that farmers whose loans were restructured in 2016 would also be covered, up to a cap of Rs1.5 lakh. Frequent changes in eligibility conditions led to a lot of delay and administrative constraints in resolving them.

In many cases, the waiver was uncertain, the loan amount being waived was staggered, and finally it was so delayed that it did not provide the required relief at the needed time. Farmers stood with their spouses and aged parents in long queues, filing digital applications for days during winter last year. When finally the loan was waived for some, after an endless wait, they still had to pay the interest on these loans. And those who did not get any relief at all are still waiting for information on their applications.

Not only did farmers have many difficulties in proving their eligibility and getting the loan waiver, they were unable to get new loans because banks have been reluctant to issue fresh loans after a slump in repayments.

Loan waivers are only one aspect of the demands of the peasantry on which they have been agitating. They have been demanding remunerative prices for their produce and a reduction in prices of inputs, so that they can secure their livelihood through farming and provide for themselves and their families. Today, a majority of farmers are not having enough to meet even their most basic requirement and are caught in a vicious debt cycle. Waiver of debt outstanding at a particular date is no solution to their problems.

For a fundamental and lasting solution to their demands, the state must commit to guaranteeing the livelihood of the peasantry. For this, it must commit to public procurement of all agricultural produce at remunerative prices. It must invest what is required for the public procurement, storage and transport.  The state must further commit to wholesale and retail distribution of the produce so that the working population in the countryside and cities is guaranteed quality food and essential items at affordable prices.

The bourgeoisie uses various excuses to justify why the state cannot procure agricultural produce and take up wholesale and retail distribution of the same. Lack of finances with the state and central governments is one excuse for not investing in the essential infrastructure. Further it uses the issues of agricultural prices to drive a wedge between the producers and the working population of the cities and countryside who consume these basic items by saying that remunerative prices for farmers will fuel inflation and make food and other basis items expensive for the working population. These lies must be rejected by the workers and peasants.

It is clear that the crisis of livelihood being faced by the peasantry will not end unless there is a reorientation of the economy with the aim of securing the livelihood of those who toil. This is the only way the agricultural producers will be guaranteed a human existence and the working population will be guaranteed the essential items in good quality and at affordable prices. These are not conflicting interests. It is towards this common end that workers and peasants must build their unity and organize to fight for a fundamental change in the system that will provide for all toilers. They must organize to fight for worker-peasant rule that will reorient the economy in the interest of all working people.


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Jan 16-31 2019    Struggle for Rights    Rights     2019   

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