While announcing the guidelines for the farmers’ loan waiver scheme last week, the government added an extra slice of waiver for larger farmers with holdings of more than 2 hectares. The total cost of this exercise has gone up from the Rs 60,000 announced in the budget to Rs 71,680 crore. But farmers’ groups are still not impressed. With only 27 per cent farmers having access to institutional credit, how much impact will this exercise have? Further, they believe it is not good enough for farmers of dryland areas with bigger loans than is being estimated by the government. Sonu Jain looks at the fine print of the scheme

•How many farmers are likely to benefit?

According to government estimates, 37 million small and marginal farmers and 5 million ‘other farmers’ will now benefit.

•Which farmers are eligible?

As announced in the budget, marginal farmers have been defined as those cultivating agricultural land up to 1 hectare. A small farmer is defined as cultivating between 1 hectare and 2 hectares. They will get full debt waiver of their short-term crop loans. According to government estimates, in most states, the small and marginal farmers account for between 70 to 94 per cent of all farmers.

‘Other’ farmers are those owning over 2 hectares. They will get One Time Settlement (OTS) relief of 25 per cent waiver.

The new feature added in the revised package is the following: in respect of 237 identified (mostly dry) districts, the OTS relief will be 25 per cent of the overdue amount or Rs 20,000, whichever is higher. Thus, if a farmer’s overdue was Rs 60,000, he would have got Rs 15,000 written off in the original proposal, which will now be enhanced to Rs 20,000.

... contd.