With its Rs 600 billion farm loan waiver in the current budget, the government has applied some band aid to the financial haemorrhaging of India’s farmers. It is another matter that the hurt is at some other place. The farmer has difficulty in obtaining cheap and reliable credit; various laws prevent him from selling his produce at the most competitive prices in the open market; there is no reliable advice available to him on how best to tend his fields in an economical manner; existing farming techniques, guided by corporate interests, continue to suck life out of the soil without replenishing it and there is no system of health security in the villages. On all these counts, the government has yet to show even minimal movement.

The farm loan waiver gives the impression that farmers do not wish to repay their loans. This is a serious misrepresentation of the ground reality. According to figures from the NABARD, only some 10 per cent of the farmers default on bank loans. And even then, it is rarely that farming assets are taken away by the banks for failure to pay back loans.

The problem for farmers lies in the loans taken from informal sources: moneylender and relatives. Often, the moneylender himself is a prosperous neighbourhood farmer. He gives large loans that are beyond the paying capacity of the borrower. These loans come with exorbitant rates of interest and severe penalties for default. The lender here does not falter in taking away farming assets, including land. After all, this could be a strategy for acquiring more land for himself. The advice of the agriculture minister a few days ago at Mumbai that farmers need not pay back loans taken from ‘unauthorised’ moneylenders is almost impossible to follow for someone who wants to live and work in the village.

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