Mumbai, August 27, 2004:

Organised by
Project for Economic Education • The Virginia Tobacco Growers Association of India •
Indian Liberal Group
Held on July 24 and 25, 2004 at GUNTUR, Andhra Pradesh

Abstract of recommendation relating to the need for immediate relief to farmers

1. The seminar noted that the long-term solutions proposed by the seminar might take time to get implemented, if so desired by the Government. However the distress felt by the farmers required immediate attention to check the phenomenon of suicides before they take ugly dimensions and before suicides lead to homicides.
2. The seminar recommends that a fresh dose of money for agriculture operations is necessary to be made available to the farmers for their crop production. This is possible only if a loan waiver of some kind is made available to them, to make them eligible for fresh loans.
3. The Agriculture and Rural Debt Relief Scheme of 1990 could be one model. The seminar is of the view that the proposed scheme should not be too general or liberal but be specific to the present need of the farmers in getting fresh loan for the next crop production. Therefore, the scope should be limited to agriculture and exclude rural development. Also the term loans, and loans for allied activities should be excluded. The scheme should be confined to only Short- term crop production Loans. The scheme may be called Crop Loan Waiver Scheme, 2004.
4. It is proposed that overdue short term/crop loans of farmers taken from co-operatives and commercial banks be waived up to Rs 10,000 (principal and interest combined). The scheme should also cover gold/jewel loans availed of for crop production. It is felt that the overdue short term/crop loans of all marginal farmers and of small farmers to a very substantial extent, will be covered and they will become eligible for fresh short-term loans from co-operatives and banks. The burden of such loans on the other farmers will also be reduced.
5. It is felt that the scheme, if announced, can be implemented within two months and fresh loans will be available to farmers for the winter rabi crop. The cost of the scheme will not exceed Rs. 5,000 crores. The farmers will get a chance to survive and expect a cycle of new crops.
6. The seminar was of the view that inaction by not doing anything and allowing the situation to drift is fraught with danger. The amounts involved from the government's budget are fully justified. The scheme will be a one-time operation only and will not damage the credit institutions, as they will be fully compensated by the Government.