With small and marginal farmers getting a raw deal when it comes to farm loan waivers, the National Bank for Agriculture and Rural Development (NABARD) plans to create a farmer distress index (FDI) to track, identify, and assist the really needy and distressed farmers.
Instead of doling out distress packages to all farmers uniformly, the government and financial institutions might decide on a suitable package of help based on the severity of distress. "We are considering creating such an index." It will benefit the most vulnerable and troubled farmers. "It hasn't been sorted out yet," Nabard Chairman G R Chintala stated.
This index will not be consistent across the country because stress levels vary from place to place. It will also benefit the whole financial industry, as well as government agencies and insurance businesses. While a farmer's distress is often judged by the level of agricultural loss, this leaves far too many troubled farmers in other places out of the beneficiary's grasp.
According to a survey performed in Punjab by Nabard and Bharat Krishak Samaj (BKS), a farmers producers' organization, more than 60% of 'very high' and 'high' distress small and marginal farmers (SMFs) did not obtain farm loan waiver (FLW) benefits. The exclusion rate for SMFs in the medium distress category was similarly 60%.
In Maharashtra, SMFs that were classified as 'low' distress received the highest FLW benefits. Nearly 42% of SMF in the 'very high' distress category did not obtain FLW benefits.
In UP, 47% of SMF in the "very high distress" category and 45% of SMF in the "high distress" category did not obtain FLW benefits. More than 40% of the 'very high distress' farmers in the three states did not obtain FLW benefits.
Sugarcane farmers who had taken loans in Maharashtra and Uttar Pradesh usually had irrigated land and were promised a fair price in the form of FRP (fair and remunerative price) and SAP (state advice price). They all received the benefit of a farm loan waiver. Small and marginal farmers on unirrigated lands and growing lower-value commodities (especially those not acquired at MSP) may not have taken crop loans. As a result, they have not profited from FLW schemes, according to the research. There have been complaints about wealthy farmers benefitting from farm loan waivers offered by several state governments in recent years.
Moreover, depending on the nature and degree of the difficulty, the assistance can take the form of a combination of unconditional gifts, loan modification, and/or a total debt waiver. Individual farmer financial support can be based on a combination of district index and individual farmer distress as measured by irrigation status of his land, income from crops grown by him, the average productivity of the district, and average price in APMC markets of this district in comparison to the state average price.
