‘It will also help protect the financial health of banks saddled with bad loans’

Prof. Jayati Ghosh of Jawaharlal Nehru University has mooted a win-win proposal to bailout debt-ridden ryots on the one hand and protect the financial health of banks as political parties vie with one another in announcing farm debt waiver in several States with elections round the corner

“Setting up of debt relief commission is the way out to study each case of debt-ridden farmer case by case and provide appropriate relief to ryots concerned with genuine debt problem and at the same time ensure that banks are not overburdened with unbearable bad loans,” said Prof. Jayati Ghosh, who had went deep into the causes of debt-ridden farmers taking the extreme step of ending their lives in the united Andhra Pradesh.

“This would silence the critics of debt waiver scheme raising a hue and cry over the economic burden associated with periodic loan waiver on the financial health of banks,” she said here on Sunday while taking note of moral hazard associated with recurring loan waiver resulting in slippages in existing loan repayments by farmers in anticipation of write-offs.

Monthly pension

Setting the farmers agenda ahead of polls for a fair deal to ryots caught in a debt trap at a seminar organised by the CPI(M)-led All India Kisan Sabha here, she said the Centre should provide each farmer crossing the age of 60 years a monthly pension of at least ₹4,000 to ensure minimum social security in the evening of their lives.

She suggested imposition of 1% wealth tax and 20% inheritance tax to address the deep-rooted agriculture crisis and bailout the debt-ridden farmers who also took loans for health and education expenses.

Backing the demand for adding 50% of cost of production which included cost of capital and the rent on the land mooted by noted agriculture scientist M.S. Swaminathan, she, felt any big a hike would not have meaning when public procurement agencies left farmers to fend for themselves against hostile market forces.

She said that cash transfer to farmers in lieu of farm subsidies was not the best solution as this would benefit only a minuscule section of farmers with clear land title leaving in the lurch tenant farmers who accounted for a majority of growers at the grass-roots level.

A positive change for the better since she came out with a voluminous report was the implementation of the Mahatma Gandhi National Rural Employment Guarantee Scheme(MG-NREGS), she said and wanted the wage employment scheme to produce organic fertilizers and pesticides for the benefit of farmers. The self-styled cow protectors, did a disservice to the cause of farmers, especially in drought-prone areas, by destroying the livestock economy, she said.

It was a double blow for farmers as the unfriendly exim policy allowed import of cheaper farm produce from abroad and disallowed export of farm produce with higher price overseas.