India proposes to waive $15 Billion of farm loans

Bigzero · Feb 29th, 2008, 17:20

NEW DELHI (Reuters) - India proposes to waive 600 billion rupees of bank loans to farmers, the finance minister said on Friday in his annual budget for the fiscal year that begins in April.

More here:
http://in.reuters.com/article/busine...32224120080229

A good move from the government, considering the number of farmer suicides happening in the recent years. Of course, Election coming next year must have something to do with it, but a large number of farmers will definitely be benefited immediately.

The bank stocks have understandably dipped. But it seems the Govt. is partially bearing the burden - though I dont know to what extent.

There have been quite a few farmer deaths, especially in AP - Its the typical case - banks offer loans to farmers left right and center, the farmer invests this towards enhancing his output, eventually due to multiple reasons ( low yield, low prices, etc etc ), runs into losses and default payments, the harassment cycle starts, and finally the farmer ends his life, unable to resolve the whole situation.

I hope a few suicides will be averted with this . The question however is, is this a real solution to the problem? In my view the same story may repeat next year too unless the Govt helps the farmers in being financially independent in some way.

Nick-H · Feb 29th, 2008, 19:39

Good News!

crvlvr · Mar 1st, 2008, 00:36

I am sorry. I have to disagree. This is not the first time the govt is waiving loans to farmers. IMHO, its another way for the political party to purchase votes using the public's money. A lot of the farmers are going bankrupt beecause of the increased costs of seed and pesticides -- a direct result of global MNC entering the Indian market place and lack of proper infrastructure.

What is the point in the Indian govt lending billions? Just so that the farmer can spend it on seeds and pesticides from the MNC. Eventually the crops fail because of lack of water. This cycle is repeated over and over year after year, to what end? Lining the pocket books onf the MNCs perhaps?

http://www.zmag.org/content/showarti...m?ItemID=10459
http://www.tribuneindia.com/2002/20021230/agro.htm#2

Nick-H · Mar 1st, 2008, 00:49

Hmmm, yes, and I'm reminded by a cartoon in a newspaper that much of the farmers loan problems come from unofficial loans from loan sharks --- which the government relief is not going to affect at all.

Bigzero · Mar 1st, 2008, 09:53

The more I look at it, the more I see it as an election stunt. Its definitely a feel-good news, and I am sure a lot of farmer's are happy ( in fact today's morning papers were mentioning approx how many farmers are likely to be benefited and the numbers are huge.. ). However, unless something changes at the ground level the vicious cycle will continue to exist.

chAos · Mar 4th, 2008, 03:31

This is not necessarily about the loans, but maybe a related question. I've been interested in sustainability of small farms in India (= no suicides) for some time. Now that we'll be relocating to Hyderabad, I'm wondering if you might know of any organizations nearby that are doing useful work in this area. A search online brings up a lot of stuff, but was wondering if you might have any on-the-ground information.
Thanks much.

batistuta · Mar 4th, 2008, 05:36

I agree with Bigzero. This is an election stunt. It is not going to change the grassroot scenario. Superb timing by the FM. The Psu banks are left in a limbo because the FM is not clear on how the banks are going to be compensated.

Lo and behold! the banking stocks get hammered in the markets.

Feb 29th, 2008, 17:20	#1
Bigzero back to my old ways Join Date: Oct 2003 Location: Hyderabad Posts: 1,464	India proposes to waive $15 Billion of farm loans NEW DELHI (Reuters) - India proposes to waive 600 billion rupees of bank loans to farmers, the finance minister said on Friday in his annual budget for the fiscal year that begins in April. More here: http://in.reuters.com/article/busine...32224120080229 A good move from the government, considering the number of farmer suicides happening in the recent years. Of course, Election coming next year must have something to do with it, but a large number of farmers will definitely be benefited immediately. The bank stocks have understandably dipped. But it seems the Govt. is partially bearing the burden - though I dont know to what extent. There have been quite a few farmer deaths, especially in AP - Its the typical case - banks offer loans to farmers left right and center, the farmer invests this towards enhancing his output, eventually due to multiple reasons ( low yield, low prices, etc etc ), runs into losses and default payments, the harassment cycle starts, and finally the farmer ends his life, unable to resolve the whole situation. I hope a few suicides will be averted with this . The question however is, is this a real solution to the problem? In my view the same story may repeat next year too unless the Govt helps the farmers in being financially independent in some way. __________________ miles to go.... Bigzero's Photo Gallery

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Feb 29th, 2008, 19:39	#2
Nick-H Loud-mouthed, Noisy Bird Join Date: Oct 2004 Location: Chennai, India Posts: 27,763	Good News! __________________ . Just one member of the IndiaMike Mod Team

Mar 1st, 2008, 00:36	#3
crvlvr Guru Join Date: Sep 2004 Location: Hollywood Posts: 4,509	I am sorry. I have to disagree. This is not the first time the govt is waiving loans to farmers. IMHO, its another way for the political party to purchase votes using the public's money. A lot of the farmers are going bankrupt beecause of the increased costs of seed and pesticides -- a direct result of global MNC entering the Indian market place and lack of proper infrastructure. What is the point in the Indian govt lending billions? Just so that the farmer can spend it on seeds and pesticides from the MNC. Eventually the crops fail because of lack of water. This cycle is repeated over and over year after year, to what end? Lining the pocket books onf the MNCs perhaps? http://www.zmag.org/content/showarti...m?ItemID=10459 http://www.tribuneindia.com/2002/20021230/agro.htm#2

Mar 1st, 2008, 00:49	#4
Nick-H Loud-mouthed, Noisy Bird Join Date: Oct 2004 Location: Chennai, India Posts: 27,763	Hmmm, yes, and I'm reminded by a cartoon in a newspaper that much of the farmers loan problems come from unofficial loans from loan sharks --- which the government relief is not going to affect at all.

Mar 1st, 2008, 09:53	#5
Bigzero back to my old ways Join Date: Oct 2003 Location: Hyderabad Posts: 1,464	The more I look at it, the more I see it as an election stunt. Its definitely a feel-good news, and I am sure a lot of farmer's are happy ( in fact today's morning papers were mentioning approx how many farmers are likely to be benefited and the numbers are huge.. ). However, unless something changes at the ground level the vicious cycle will continue to exist.

Mar 4th, 2008, 03:31	#6
chAos I have a theory... Join Date: Mar 2008 Location: dakshin Posts: 884	This is not necessarily about the loans, but maybe a related question. I've been interested in sustainability of small farms in India (= no suicides) for some time. Now that we'll be relocating to Hyderabad, I'm wondering if you might know of any organizations nearby that are doing useful work in this area. A search online brings up a lot of stuff, but was wondering if you might have any on-the-ground information. Thanks much.

Mar 4th, 2008, 05:36	#7
batistuta Maha Guru Member Join Date: Jan 2006 Location: Bangalore Posts: 1,729	I agree with Bigzero. This is an election stunt. It is not going to change the grassroot scenario. Superb timing by the FM. The Psu banks are left in a limbo because the FM is not clear on how the banks are going to be compensated. Lo and behold! the banking stocks get hammered in the markets.

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