By Adhirath Sethi Dec. 21, 2018
The farm loan waiver is the political Brahmastra, the Draw Four card you play just before the other guy is about to shout “Uno!” because it’s a lot easier to keep farmers on the brink of financial ruin and then sprinkle waivers around to remind them which political party really cares.
et’s all wear our objective hats for a moment and forget that a bulk of this nation’s poor depend on agriculture for their income. Good. Now that we’re truly immune from being branded “insensitive”, let’s discuss farm loan waivers and hope the internet remains the civil ground for debate that it has always been.
The recent defeat of the BJP in certain key states means that the opposition has smelt blood and intends to pull every trick in the book to regain power in 2019. And there exists no better a trick than a good old-fashioned farm loan waiver. Once the Congress announced it was waiving farm loans, obviously the BJP couldn’t be left behind. They too announced a slew of waivers. It’s like watching a divorced couple outdo one another by buying gifts for their child during Christmas. Only it’s sadder, because they’re taking the tax money from one child to buy gifts for the other. Meanwhile, they employed a local history teacher to manage the family finances, so the children are left wondering whether there will even be another Christmas after this.
The farm loan waiver is the political Brahmastra, the final Hail Mary, the Draw Four card you play just before the other guy is about to shout “Uno!” It is the quickest way to ensure that the favour of the masses swings in your direction without waiting for any of that inconvenient trickle-down-economics rubbish that takes way too long to yield any measurable impact.
While cosmetically the waivers offer a radiant glow than no other political-face-pack can achieve, economists have for long cried: “It’s just not worth it.” Waivers are the epitome of that old adage about teaching men to fish. You know – give a man a fish, you feed him for a day; teach him to vote and he’ll vote for you as long as you keep giving him fish.
The farm loan waiver is the political Brahmastra, the final Hail Mary, the Draw Four card you play just before the other guy is about to shout “Uno!”
It’s not at all surprising that farm loan waivers are such a blockbuster hit with the masses. After all, we hear of farmer suicides all the time and what better way for the government to signal that they care for the little guy than by helping them out of financial holes.
Anyone that questions this motive is obviously elitist, right? The closest an urban dweller even comes to understanding the plight of a farmer is when we try growing basil on our apartment balcony and find that it has suddenly died without any prior intimation. If we imagine our livelihood rested on that basil plant’s survival, it offers a tiny window into the arduous futility of farming. So how can we possibly grudge the government for using tax money to help them?
The problem with this reasoning is simply that nothing good ever came from refilling a leaking pot without addressing the leak first. The Indian farming system is so leaky, you could shower under it and be instantly drenched in the realisation that waivers are a waste of taxpayer money. In terms of financial prudence, it resonates with the same logic that investors of e-commerce companies use when pumping endless amounts of money into a company with no path to profitability. However, unlike CEOs of failing e-commerce companies, farmers aren’t looking for endless bailouts – just a rational path to financial sustainability.
Poor irrigation infrastructure, lack of education of the farmers, and a non-existent uninterrupted cold chain are only a few areas that ensure that no matter how good the monsoon, nothing is really going to improve for farmers in the long run, unless the structural issues are addressed.
Selling produce without a cold chain is a bit like trying to sell an ice sculpture in the desert… to a camel. You don’t have a lot of bargaining power, the camel’s doing fine without you, and time is against you. The value of what the farmer is offering is literally decomposing with each passing minute and in desperation they take any price that they can get. A farmer in Maharashtra recently sold 750 kg of onion for a little over ₹1,000. When you consider how many balcony-basil-plants you would need to grow to equal the effort needed to produce 750 kg of onions, it is astounding.
The Indian farming system is so leaky, you could shower under it and be instantly drenched in the realisation that waivers are a waste of taxpayer money.
But when you think about it, if you can buy onions for a little over a rupee per kilo from a farmer, and sell it for over ₹20 per kg in the shops, why would you bother with a cold chain? You can basically let 95 per cent of the produce rot in transit and still break even.
India has put so much emphasis on development, it seems ironic that we have forgotten that in developed nations, farmers do rather well financially. The main reason for this is that they are better equipped to use their available resources efficiently and have established channels for supply that aren’t hell bent on exploiting them.
All this does not even address issues such as the fact that only 25 per cent of farmers benefit from these waivers as the smallest farmers are less likely to avail credit through organised means. It has also been reported that the government does not even have data on farmer suicides after 2015, implying no one really cares about the littlest guy at all.
The sad truth about farm loan waivers, is that they’re political gold. It’s like having a little vial of magic potion that you can quickly gulp when the going gets tough. Investing in infrastructure and creating an efficient supply chain takes time, but the waiver offers instant results. Imagine a government did put the money to better use and helped farmers increase productivity and improve realisations. Not only would these initiatives take years (by which time another government might be in power and claim credit) but elevating farmers would make them so much tougher to manipulate politically. It’s a lot easier to keep them on the brink of financial ruin and then sprinkle waivers around to remind them who really cares.
Adhirath Sethi is a novelist based in Bangalore. He sits around waiting for beards to stop being cool, because he can’t grow one. If you see him online, don’t engage… he’s just there for the stalking.