Farm loan waivers are neither adequate nor recommended for promoting sustained agricultural growth. Analyze.

Farm loan waiver refers to the payment of agricultural loans by the government and exemption of farmers from doing the same.

Farm loans waivers are inadequate:

• Only 60% of farmers take a loan from formal banks and the rest depend on informal moneylenders, whose concerns remain unaddressed by waivers.
• Farm loan waivers only help the landowning farmers and not landless or tenant farmers.
• As only 15% of agricultural credit is given to small and marginal farmers, farm loan waivers mainly help big farmers, who are just 14% of total farmers.

Farm loan waivers are not recommended for sustained agricultural growth:

• Farm loan waivers only help farmers superficially without addressing the underlying structural issues.
• It is assumed that a farm loan waiver can lead to greater investment in agriculture by farmers, but it is untrue. Since small and marginal farmers have a monthly income of Rs. 6550 (NSSO 2016), any waiver only helps them to avoid the additional burdens.
• Farm loan waivers create a culture of indiscipline among farmers, who wait for waivers to be announced.
• Farm loan waivers have had no impact on farmers’ suicides. 76% of suicides among farmers occurred due to a lack of irrigation in their fields.

Thus, structural reforms like access to irrigation, markets, and proper returns on their crop are the need of the hour. Farm loan waivers create unsustainability in agriculture, as farmers take loans hoping for a waiver. Instead, Ashok Dalwai committee recommendations can help in bringing structural reforms.