Vidarbha relief: Deshmukh, secys to work on new ideas

Even as Maharashtra Chief Minister Vilasrao Deshmukh meets various secretaries on Monday to finalise the proposals...

Even as Maharashtra Chief Minister Vilasrao Deshmukh meets various secretaries on Monday to finalise the proposals to be sent to the Centre in response to Prime Minister Manmohan Singh’s call for changes in the relief package for Vidarbha farmers, the state would be thinking of ways to bring back the six lakh farmers who were omitted from this year’s credit disbursal for defaulting on last year’s loans.

The 9.33 lakh farmers who got fresh loans last year after it was rescheduled and interest waiver ended up with a total loan burden of Rs 2,200 crore, including the Rs 800 crore interest. Their loans were rescheduled bringing down the amount to Rs 2,000 crore. With only four lakh being able to repay their debts, six lakh farmers were left with a debt burden. They were also not given new loans this kharif season.

Given its stated position against loan waiver, the only way before the state government is to give another interest waiver and make the farmers eligible for fresh loans in the coming rabi and next kharif season.

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The waiver, if effected, would not cost the state government more than Rs 60 crore, since the interest was charged only at 6 pc. The six lakh farmers left out of this year’s credit programme have a total outstanding loan of Rs 1,000 cr. This is precisely what the CM would have to finally decide on this Monday.

Former Amravati Divisional Commissioner and Principal Secretary, Co-operatives, S K Goel, in his presentation before the Prime Minister in Mumbai this August, had suggested a conditional total loan waiver for farmers willing to take up organic and contract farming. The idea is to waive off all their outstanding loans in three years at the rate of one-third each year if they adopt organic or contract farming.

The suggestion had been appreciated by the PM as “laudable”. But some in the Government did not find it “practical” as it might attract dissent from farmers who won’t agree to the conditions.

Also on the agenda could be incentives for the textile and other firms roped in to draw up contracts with farmers in the region. Another idea is for the Government to bear the management cost that the firms would be required to incur for coming to Vidarbha and buying the produce.

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Using the new Warehousing Act passed by the Centre to good effect in the state could be another idea to be discussed at the meeting. The Act provides for allowing the farmers to keep their produce in the godowns. By producing the godown receipt, they would be able to get loans from banks at nominal interest rates against a pledge to sustain themselves till they could actually decide to sell off their produce when the markets offer best price.