Renowned agriculture scientist MS Swaminathan stated that, though loan waiver is temporarily necessary in the short term, as the farmers are unable to pay off the debts, but it does not provide secure credit system in the long term.
After the protest held by farmers in many states, demanding for complete loan waiver and purchase of farm products at the minimum support price (MPS), government of Uttar Pradesh, Madhya Pradesh, Andhra Pradesh, Telangana, and Maharashtra have agreed to the demand to loan waiver.
Commenting on the prevailing situation Swaminathan said that the complete loan waiver may be temporarily necessary but in the long term, loan waiver does not provide secure credit system as this would lead to inadequate funds for agri-infrastructure development.
Swaminathan, who is also known as the Father of India’s Green Revolution tweeted that “Loan waivers though temporarily necessary, don’t provide secure long-term credit system. It implies that banks are compensated by government.”
Loan waivers though temporarily necessary, don't provide secure long-term credit system. It implies that banks are compensated by government
— M S Swaminathan (@msswaminathan) June 13, 2017
The need for the demand of complete loan waiver arised because without repaying debts, farmers will not get fresh kharif credit. The farmers are unable to repay the debts inspite of bumper crop this year because of drop in the minimum support price, the farmers could not get the deserved price for their farm products.
Swaminathan had recommended non-farm initiatives with agri-enterprises along with MNREGA for social protection to landless farmers back in 2004.