Incredible India! Wilful defaulters buy properties; farmers offer to sell body organs to pay-off loans

If seen in conjunction with the report of auction of body organs proposed by some farmers in Hingoli district that was mentioned earlier, the continuing distress in Maharashtra calls for an urgent policy response. So is with the rest of the country where too farm distress is deepening. The Maharashtra Finance Minister Devendra Fadnavis has already announced doubling of the PM Kisan scheme allocation

A few days back, 10 indebted farmers from Hingoli district in Maharashtra made a unique but strange plea to the Chief Minister. They were willing to put their body organs to auction so as to pay back loans to the nationalised banks from the money so raised.

They offered to sell their body organs, and in fact had a ‘rate card’ ready -- Rs 90,000 for liver, Rs 75,000 for a kidney and Rs 25,000 for an eye. While this strange offer did create a ruckus in the Maharashtra Assembly, it was all forgotten after a few days. The tragedy being that anything that depicts agrarian distress is brushed away rather easily. It is only when defaulting corporates are unable to repay the outstanding loans, even if they are in a position to do so, that not only the political leadership but even the Reserve Bank of India (RBI) throws a protective ring.

It happened a few months back, when acting as a ‘raksha kavach’, the RBI directed banks to enter into a compromise with 16,044 wilful defaulters, who in any case should have been sent to jail for defaulting banks to the tune of Rs 3.45-lakh crore. Wilful defaulters are those who have the ability to pay, but refuse to do so. In reality, they give a damn to the rules and regulations that the banking system has ascribed.

And yet, the RBI has been soft towards them. After a cooling period of 12 months, banks have also been allowed to extend fresh loans to them. Thanks to RBI, these wilful defaulters literally got a write-off for their deliberate inability to pay back, and yet are being given fresh loans that they can again default. With precedence now in place, they will be expecting another write-off after a few years.

If only the RBI had asked banks to go soft on defaulting farmers, I am sure a majority of the farm and farm worker suicides the National Crime Record Bureau (NCRB) had reported for 2022 could have been easily averted.

Against 10,881 farm suicides reported in 2021, NCRB recorded farm suicides to be 3.7 per cent higher in 2022 when a total of 11,290 farmers and farm workers took the fatal route. In 2022, of the 5,207 farmers who took their own lives, 208 were women. Similarly, of the 6,083 farm workers who committed suicide, 611 were women. Most suicides were reported from Maharashtra, Karnataka, Andhra Pradesh and Madhya Pradesh.

Maharashtra alone reported 38 per cent of the total farm suicides, recording 4,248 suicides. If seen in conjunction with the report of auction of body organs proposed by some farmers in Hingoli district that was mentioned earlier, the continuing distress in Maharashtra calls for an urgent policy response. So is with the rest of the country where too farm distress is deepening.

The Maharashtra Finance Minister Devendra Fadnavis has already announced doubling of the PM Kisan scheme allocation. In addition to Rs 6,000 per year that the Centre provides, Maharashtra will match it with an equal amount thereby raising the allocation to Rs 12,000 per year. Over 1.7-crore farmers have been given the benefit of crop insurance at Re one but who will ensure that the insurance companies compensate them judiciously for the crop losses farmers suffer? We have seen reports of Rs 15, Rs 100 and Rs 200 and so on, paid to farmers for crop losses. Crop insurance is touted as a big benefit for farmers, but the data shows that private insurance firms have walked away with profits of Rs 57,619-crore since the scheme began in 2016. In reality, PM Fasal BimaYojna (PMFBY) seems to be a scheme that ensures large profits for the bima companies.

Nevertheless, a handout here and there is not going to work. What Maharashtra needs is an alternative package of holistic policies and related incentives that can sow the seeds of a revitalised agriculture. After all, if just 4 per cent area under sugarcane can draw 70 per cent of the groundwater, how will the doles help to rebuild farming unless the water balance is set right? But the bigger question is who will have the political courage to even talk of phasing out the area under water-guzzling sugarcane? This is just one imbalance that is related to the economic viability of any farm.

Across the country as such rural wages have been on the decline, and even the agriculture gross value addition (GVA) has been the lowest since FY 2012, thus driving rural consumption down.

The economic boom that we see is concentrated in the hands of the top 10 per cent. This is seen mostly through the lens of automobile sales. While the sale of four-wheelers is growing in the metros, with the maximum growth in the luxury segment, the sale of two-wheelers is still not picking up. It is generally expected that that an increase in rural wages is what makes the rural population shift from bicycle to scooters or motorcycles.

As the NCRB observes, agrarian distress is the primary reason behind the increasing suicide rate. It also is the reason for rural demand to remain tepid. Perhaps a better reflection of the deteriorating farm scenario comes from the latest report of the Organisation for Economic Cooperation and Development (OECD), the richest trading block.

In an analysis of the farming sector in 54 of the major economies, including 38 members of the OECD, the study shows that farmers in India have been continuously taxed since the year 2000. Although there are a few countries where agriculture is in the negative zone but all these countries have covered up the farm losses by budgetary support. In India, budgetary support has failed to make up for the continuing shortfall in farm incomes. Simply put, it means while all other sectors of the economy receive ample support through annual budgets, it is only farming that is left at the mercy of gods.

At the same time, the study clearly establishes that the budgetary support for agriculture, despite many schemes being introduced over the years, has failed to translate in a profitable income for the farming community. The economic design is so cleverly cast that although farmers are hailed as food providers or annadatas, what they receive as support is a pittance. This is the primary reason why agriculture continues to struggle against all odds, and with each passing year the level of distress only grows.

As I have repeatedly said: little do the farmers realise that when they undertake cultivation they actually end up cultivating losses.

(The author is a noted food policy analyst and an expert on issues related to the agriculture sector. He writes on food, agriculture and hunger)