Maharashtra’s farm loan waivers to aid Vidarbha, Marathwada farmers more


Mumbai: By capping the farm loan waiver at Rs1.5 lakh per farmer regardless of land holding, the Maharashtra government has ensured that farmers in the critically affected Marathwada and Vidarbha stand to gain more than those in the prosperous western and northern regions.

Farm activists and at least one member of the farmers’ steering committee say that the Rs34,022 crore debt-waiver is a much bigger and more effective relief for farmers in the dry-land regions of Vidarbha and Marathwada than the 2008 waiver given by the Congress-led United Progressive Alliance government.

The other steering committee members, however, who are mostly from western and north Maharashtra, are still insisting on a blanket waiver without any riders.

“This is certainly a more substantial relief for farmers in Vidarbha and Marathwada as compared to the 2008 loan waiver because it does not put the condition of land holding. The 2008 package had put in restrictive conditions—land holding of maximum five acres for a total loan waiver as well as monetary cap of Rs20,000 per acre for those farmers holding more than five acres,” said Vidarbha-based farm activist and member of the steering committee Vijay Jawandhiya. He said the average agriculture land holding in Vidarbha and Marathwada was more than five acres and that the land holding cap in 2008 had deprived many farmers of the total waiver benefit. “But the individual quantum of farm loan (taken out by farmers) in Vidarbha and Marathwada is smaller than that in western and north Maharashtra because dry land farmers are eligible for loans of only up to Rs20,000 per acre. In 2008, more than 70% of the benefit of loan waiver was taken by farmers in Western Maharashtra region because the average land holding there is small as compared to Vidarbha and Marathwada though the quantum of individual debt is higher since farmers with irrigation facility are eligible for bigger loans,” Jawandhiya said. He said ignoring the interests of Vidarbha farmers in particular would have been “politically incorrect” for Fadnavis, who is from Vidarbha.

Jawandhiya acknowledged that the 2017 loan waiver could lead to farmers in Western Maharashtra feeling aggrieved. “That is why I had suggested that the cap should be raised to at least Rs2 lakh so that farmers in Western Maharashtra also get a bigger relief,” Jawandhiya said. He also expects more clarity from the government on how the banks are going to be compensated.

“Fadnavis has said that banks would be compensated in a staggered manner. Banks must not use the staggered repayment as an excuse to deny fresh credit to farmers,” he said.

As per the 2011 agriculture census, the average land holding in Maharashtra is 1.44 hectares. Barely 18% of Maharashtra’s total cultivable land is irrigated and western and north Maharashtra account for more than 85% share of even this irrigation potential. Vidarbha and Marathwada are largely rain-fed. Also, farmers in western Maharashtra (Pune, Kolhapur, Sangli, and Solapur belt) and north Maharashtra (Nashik) largely grow water-intensive crops like sugar cane, pomegranate and grapes, apart from other horticulture and food crops and dairy farming which thrives on the availability of cattle fodder.

In comparison, farmers in Vidarbha and Marathwada mainly grow cotton, paddy, pulses, and oilseeds. “In western and north Maharashtra, a sugar cane or grape cultivator with barely a two-acre land holding is eligible for at least Rs2 lakh loan because these are expensive crops and are grown only if irrigation is available. The lending institution is assured of repayment and chances of default are minimal,” said an agriculture department official requesting anonymity.

However, this is not the case in dry land regions that are dependent on the rains, which have become increasingly erratic.

Ever since the farm loan waiver was demanded, chief minister Fadnavis has emphasized the failure of the 2008 scheme, claiming that Maharashtra had a share of Rs7,000 crore only of the national write-off and there were several cases of ineligible farmers reaping the benefit as pointed out by the Comptroller and Auditor General.

“This was one of the reasons why the 2008 scheme did not stop suicides in Vidarbha and Marathwada. In 2008, even the long-term loans taken by Western Maharashtra farmers got waived while deserving farmers in Vidarbha and Marathwada got little relief. We have always insisted that land holding should be not the criterion,” said Vidarbha-based farm activist Kishore Tiwari who heads the special task force formed by the state government to suggest solutions to the agrarian crisis.

Tiwari alleged that the steering committee was mostly serving the interests of big farmers in Western Maharashtra. “The loan waiver scheme has to be expanded to include loans extended by micro-finance companies to women’s self-help groups and honest farmers who have regularly repaid their loans should also get the benefit of Rs1.5 lakh waiver,” Tiwari said.

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