Karnataka in the trap

Mamtha Sharma
From Bengaluru

H D Kumaraswamy When JDS leader and current chief minister, H D Kumaraswamy, promised in the party's manifesto for the May 2018 assembly elections that he would waive farmers' loans on coming to power, little did he realise that the time to walk the talk would come sooner than expected.
After becoming chief minister, albeit of a coalition government, he suddenly found that it was easier to make commitments than to fulfil them. Witness ,therefore, the manner in which he was tying himself in knots while seeking , initiallly, to bluster his way out of the commitment he had made to the farmers in the party's manifesto.
His conflicting statements since then on the crucial issue did make matters worse for him, till Congress president Rahul Gandhi provided him the necessary support . It was important, considering that it was the national party which had propped him up as the chief minister of the JDS-Congress combine in the state , in the process pulling the carpet from under the feet of a bewildered BJP .

Rahul Gandhi And, now that Kumaraswamy has bitten the bullet , he finds that there are more detractors within and outside the coalition on the crucial issue than he bargained for. The estimated dues of the farmers stand at about Rs 1.14 lakh crore while Kumaraswamy had agreed earlier to waive up to Rs 53,000 crore. Significantly, Karnataka's annual budget hovers around Rs 2 lakh crore. Till recently , nobody had any clue as to where the funds to provide the benefit would come from as the coalition government, at least, had not provided for it in its maiden budget. At a conservative estimate the state would need to spend Rs 44 ,000 crore for now to meet its first instalment of the waiver promise.
All that the chief minister kept parroting, when confronted with this all important question is: "Wait and see. I know my maths." He has, raised the taxes on petrol and diesel to partially meet the challenge ,in the process leading to more criticism than he can handle. Witness, therefore, his tearful, even if public ,recount of his hurt over the issue.

Vote bank politics

Even though such emotional outbursts run in the DNA of the family, as one has often witnessed his father Deve Gowda,doing the same ,and quite often, in the past, it did not behove a chief minister to display his failure in handling the all important post . No wonder he was rebuked by none other than the leaders of the coalition party themselves .
Karnataka, is not alone in providing such benefits to woo the farmers as its counterparts in Maharashtra, Uttar Pradesh and Telengana too were bitten by the bug earlier. These efforts were, aimed more at vote bank politics than any serious attempt to help the indebted, constrained farming community.

Local politicians narrated horrible stories of how some farmers had committed suicide ,unable to bear the embarrassment and humiliation from the money lenders who would come and shout outside the defaulters' premises. In many cases, they would be ruthless , even asking the farmers to leave their female relatives in their custody to make good the default.

In fact, going by available figures , about Rs 200,000 odd crores worth of loans have been waived by different states in recent years. And, with Rajasthan Mizoram,Chattisgarh and Madhya Pradesh also going to polls this year, it is no secret that political parties will make similar promises in the run-up to the elections.
In Karnataka's case, waiver of farm loans has virtually become a normal affair considering that the past governments under BJP- JDS coalition and the Congress have found it prudent to announce such benefits for the farmers. It is another matter that these concessions rarely help the needy community,especially those with small holdings. Let us not forget, majority of the farmers have only small holdings and it is the large farmers who end up benefiting more from the government sops.

Farmers' show of protests If Kumaraswamy ,like other politicians, really believed that loan waivers would ease the debt ridden farmers' plight, even as the number of suicides in Karnataka at 3500 over the last few years mounted , he could not have been more wrong. In fact, a recent visit by Power Politics to the sugar belt of Mysuru and Mandya was an eye opener. Several farmers , as we discovered , did not take loans for agricultural purposes but more to meet their basic needs -----of marrying their daughters or meeting related exigencies, including building of houses; even for buying consumer goods.
Importantly, the average farmer relied more on the neighbourhood money lender who was only too happy to oblige but at high interest rates. And these Shylocks definitely took their pound of flesh when the farmers failed to repay the loans which, in some cases, were also spent on gambling.
Local politicians narrated horrible stories of how some farmers had committed suicide ,unable to bear the embarrassment and humiliation from the money lenders who would come and shout outside the defaulters' premises. In many cases, they would be ruthless , even asking the already embarrassed farmers to leave their female relatives in their custody to make good the default.
The farmers' difficulties heightened further when the sugar mills, owned largely by politicians of different parties, decided to shut their factories for maintenance, just when the crop was ready for harvesting. The worse was that despite tall claims and assurances by successive governments that they would bring the errant mills to book, no action was taken. What is more, the mill owners even cocked a snook at the governments concerned by refusing to pay the rates ,per quintal, fixed by the government.

M.S. Swaminathan with Chief Minister H.D. Kumaraswamy in Bengaluru There were a large number of farmers as well who had taken loans from cooperatives and nationalised banks for their crops but found it difficult to repay . There were instances when inclement weather destroyed their standing crops .Or ,a glut like situation saw them dumping their products onto the roads even as government agencies responsible for purchasing their produce failed to provide the needed support.
Predictably, the governments of the day did little to help the distraught farmers other than twiddling their thumbs, as it were.
Under the circumstances, it was no surprise to learn that such farmers did not ever benefit from the successive governments' loan waivers . Besides , they had also taken loans from the local money lenders and not the public sector banks or the cooperatives alone.

Eminent agriculture scientist M.S. Swaminathan was clear in asserting that while loan waivers may prove useful as short term measures, they could not be the panacea for the farmers' ills.

Bad economics

This is not all. It is common knowledge that loan waivers are not the solution for mitigating the crisis faced by the farmers. Among the many options that often prop up are investment support schemes to discourage the farmers from going to private parties for loans, something which Telengana appears to have done recently in addition to waiving farm loans .
Secondly, it is imperative for the governments to help bring about structural solutions to Indian farming instead of providing quick fix solutions like loan waivers.
Farmers also need to be encouraged and motivated to adopt modern methods ,use sprinklers besides helping them to tap horticulture and cash crops as well. Unfortunately, the resurgence of the loan waiver culture does not indicate any serious attempt to find long term solutions to farmers' woes as politics becomes the main criteria. Importantly,as economists have often pointed out loan waivers can also lead to strategic defaults as borrowers' expectations of future benefits from the governments grow.
Consequently, it did not come as a surprise when the father of India's Green Revolution, Dr Swaminathan, did not mince words during his recent visit to the Vidhan Soudha at the invitation of chief minister, Kumaraswamy. It is doubtful though if the ruling political class found his plain truths palatable.
The eminent agriculture scientist was clear in asserting that while loan waivers may prove useful as short term measures, they could not be the panacea for the farmers' ills."
According to him, the state's loan waiver, perhaps, may have been a short term requirement as the farmers had found it difficult to repay their debts .Consequently, they could not get fresh credit. He subsequently told a local newspaper, " this kind of step may be necessary once to launch the farmers again into agriculture. However, it should not become a permanent method of farm economy management. What it really shows is that the economics of farming is not good. If it was good ,the farmers would repay their loans." It was no surprise to see him reiterate that it was imperative to examine measures that would increase farmers' income.
For the record,the number of farmers in Karnataka, who had taken crop loans from the nationalised and private sector banks, cooperatives and regional rural banks stood at 44.89 lakh with their outstandings coming to Rs 53,000 crore.
Significantly, of the total about 17 lakh farmers had a debt exceeding Rs 30 ,000 crore. Another 27 lakh farmers managed to clear about Rs 7000 crore worth of loans. These farmers would also benefit from the government waiver under which those who had repaid their loans partially too would become beneficiaries.



		EDITOR'S MAIL EDITOR'S COMMENT FRANKLY SPEAKING REALPOLITIK ISI WEB DRUG MENACE IN PUNJAB FARMERS' LOAN WINDOW ON M.P. HIMACHAL AGONY LOOKING BACK SIGNS OF THE TIMES PAKISTAN TODAY DRAGON DRILL IN TIBET MODI'S DIPLOMACY GLOBAL AFFAIRS REVIEW ILLEGAL IMMIGRANTS HITS & MISSES DIARY BOOK BAZAAR BOOK BAZAAR CHANGING TIMES THIRD SEX YOGA IN DAILY LIFE A SPRITUAL GURU ART OF LIVING Issue:August' 2018 Subscribe Now	FARMERS' LOAN Karnataka in the trap Mamtha Sharma From Bengaluru H D Kumaraswamy When JDS leader and current chief minister, H D Kumaraswamy, promised in the party's manifesto for the May 2018 assembly elections that he would waive farmers' loans on coming to power, little did he realise that the time to walk the talk would come sooner than expected. After becoming chief minister, albeit of a coalition government, he suddenly found that it was easier to make commitments than to fulfil them. Witness ,therefore, the manner in which he was tying himself in knots while seeking , initiallly, to bluster his way out of the commitment he had made to the farmers in the party's manifesto. His conflicting statements since then on the crucial issue did make matters worse for him, till Congress president Rahul Gandhi provided him the necessary support . It was important, considering that it was the national party which had propped him up as the chief minister of the JDS-Congress combine in the state , in the process pulling the carpet from under the feet of a bewildered BJP . Rahul Gandhi And, now that Kumaraswamy has bitten the bullet , he finds that there are more detractors within and outside the coalition on the crucial issue than he bargained for. The estimated dues of the farmers stand at about Rs 1.14 lakh crore while Kumaraswamy had agreed earlier to waive up to Rs 53,000 crore. Significantly, Karnataka's annual budget hovers around Rs 2 lakh crore. Till recently , nobody had any clue as to where the funds to provide the benefit would come from as the coalition government, at least, had not provided for it in its maiden budget. At a conservative estimate the state would need to spend Rs 44 ,000 crore for now to meet its first instalment of the waiver promise. All that the chief minister kept parroting, when confronted with this all important question is: "Wait and see. I know my maths." He has, raised the taxes on petrol and diesel to partially meet the challenge ,in the process leading to more criticism than he can handle. Witness, therefore, his tearful, even if public ,recount of his hurt over the issue. Vote bank politics Even though such emotional outbursts run in the DNA of the family, as one has often witnessed his father Deve Gowda,doing the same ,and quite often, in the past, it did not behove a chief minister to display his failure in handling the all important post . No wonder he was rebuked by none other than the leaders of the coalition party themselves . Karnataka, is not alone in providing such benefits to woo the farmers as its counterparts in Maharashtra, Uttar Pradesh and Telengana too were bitten by the bug earlier. These efforts were, aimed more at vote bank politics than any serious attempt to help the indebted, constrained farming community. Local politicians narrated horrible stories of how some farmers had committed suicide ,unable to bear the embarrassment and humiliation from the money lenders who would come and shout outside the defaulters' premises. In many cases, they would be ruthless , even asking the farmers to leave their female relatives in their custody to make good the default. In fact, going by available figures , about Rs 200,000 odd crores worth of loans have been waived by different states in recent years. And, with Rajasthan Mizoram,Chattisgarh and Madhya Pradesh also going to polls this year, it is no secret that political parties will make similar promises in the run-up to the elections. In Karnataka's case, waiver of farm loans has virtually become a normal affair considering that the past governments under BJP- JDS coalition and the Congress have found it prudent to announce such benefits for the farmers. It is another matter that these concessions rarely help the needy community,especially those with small holdings. Let us not forget, majority of the farmers have only small holdings and it is the large farmers who end up benefiting more from the government sops. Farmers' show of protests If Kumaraswamy ,like other politicians, really believed that loan waivers would ease the debt ridden farmers' plight, even as the number of suicides in Karnataka at 3500 over the last few years mounted , he could not have been more wrong. In fact, a recent visit by Power Politics to the sugar belt of Mysuru and Mandya was an eye opener. Several farmers , as we discovered , did not take loans for agricultural purposes but more to meet their basic needs -----of marrying their daughters or meeting related exigencies, including building of houses; even for buying consumer goods. Importantly, the average farmer relied more on the neighbourhood money lender who was only too happy to oblige but at high interest rates. And these Shylocks definitely took their pound of flesh when the farmers failed to repay the loans which, in some cases, were also spent on gambling. Local politicians narrated horrible stories of how some farmers had committed suicide ,unable to bear the embarrassment and humiliation from the money lenders who would come and shout outside the defaulters' premises. In many cases, they would be ruthless , even asking the already embarrassed farmers to leave their female relatives in their custody to make good the default. The farmers' difficulties heightened further when the sugar mills, owned largely by politicians of different parties, decided to shut their factories for maintenance, just when the crop was ready for harvesting. The worse was that despite tall claims and assurances by successive governments that they would bring the errant mills to book, no action was taken. What is more, the mill owners even cocked a snook at the governments concerned by refusing to pay the rates ,per quintal, fixed by the government. M.S. Swaminathan with Chief Minister H.D. Kumaraswamy in Bengaluru There were a large number of farmers as well who had taken loans from cooperatives and nationalised banks for their crops but found it difficult to repay . There were instances when inclement weather destroyed their standing crops .Or ,a glut like situation saw them dumping their products onto the roads even as government agencies responsible for purchasing their produce failed to provide the needed support. Predictably, the governments of the day did little to help the distraught farmers other than twiddling their thumbs, as it were. Under the circumstances, it was no surprise to learn that such farmers did not ever benefit from the successive governments' loan waivers . Besides , they had also taken loans from the local money lenders and not the public sector banks or the cooperatives alone. Eminent agriculture scientist M.S. Swaminathan was clear in asserting that while loan waivers may prove useful as short term measures, they could not be the panacea for the farmers' ills. Bad economics This is not all. It is common knowledge that loan waivers are not the solution for mitigating the crisis faced by the farmers. Among the many options that often prop up are investment support schemes to discourage the farmers from going to private parties for loans, something which Telengana appears to have done recently in addition to waiving farm loans . Secondly, it is imperative for the governments to help bring about structural solutions to Indian farming instead of providing quick fix solutions like loan waivers. Farmers also need to be encouraged and motivated to adopt modern methods ,use sprinklers besides helping them to tap horticulture and cash crops as well. Unfortunately, the resurgence of the loan waiver culture does not indicate any serious attempt to find long term solutions to farmers' woes as politics becomes the main criteria. Importantly,as economists have often pointed out loan waivers can also lead to strategic defaults as borrowers' expectations of future benefits from the governments grow. Consequently, it did not come as a surprise when the father of India's Green Revolution, Dr Swaminathan, did not mince words during his recent visit to the Vidhan Soudha at the invitation of chief minister, Kumaraswamy. It is doubtful though if the ruling political class found his plain truths palatable. The eminent agriculture scientist was clear in asserting that while loan waivers may prove useful as short term measures, they could not be the panacea for the farmers' ills." According to him, the state's loan waiver, perhaps, may have been a short term requirement as the farmers had found it difficult to repay their debts .Consequently, they could not get fresh credit. He subsequently told a local newspaper, " this kind of step may be necessary once to launch the farmers again into agriculture. However, it should not become a permanent method of farm economy management. What it really shows is that the economics of farming is not good. If it was good ,the farmers would repay their loans." It was no surprise to see him reiterate that it was imperative to examine measures that would increase farmers' income. For the record,the number of farmers in Karnataka, who had taken crop loans from the nationalised and private sector banks, cooperatives and regional rural banks stood at 44.89 lakh with their outstandings coming to Rs 53,000 crore. Significantly, of the total about 17 lakh farmers had a debt exceeding Rs 30 ,000 crore. Another 27 lakh farmers managed to clear about Rs 7000 crore worth of loans. These farmers would also benefit from the government waiver under which those who had repaid their loans partially too would become beneficiaries.