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7) In recent years, we have seen a lot of farmer’s protests demanding loan waivers. Discuss the effectiveness of loan waivers in solving farmer’s issues?(250 words) 

Topic – Issues related to agriculture

7) In recent years, we have seen a lot of farmer’s protests demanding loan waivers. Discuss the effectiveness of loan waivers in solving farmer’s issues?(250 words) 

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Why this question

Loan waiver has been a very frequent demand by the farmers in India including in the current protests in Delhi. Despite several experts advising against it, the political capital gained through such an exercise makes such waivers a politically convenient tool. This question therefore seeks to help you prepare the finer points of the loan waiver issue.

Key demand of the question

The question expects you to first highlight the frequent demand for loan waivers and thereafter, bring out the pros and cons of it in terms of improving the status of farmers. Finally, we need to provide a fair and balanced conclusion and discuss the way forward.

Directive word

Discuss – This is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.

Structure of the answer

Introduction – Highlight that loan waiver is a very frequent demand raised by farmers.

Body –

  • Explain why loan waivers are frequently demanded by farmers. Discuss the pros and cons of loan waivers.
  • This idea seems to be bad politics as well as bad economics because it may win the political party some votes but is not sustainable in the long run. Waiver of loan is a plain action where the credit climate is hampered. It will be counter productive not only for the state but for the entire credit market. It is a sub-optimal policy. A good policy would have been a set of things which were suggested by the Swaminathan Committee Report. On an average, the income of farmers is so low that their daily survival becomes a problem. Farm loan waivers is becoming a necessity now because these deep rooted problems are not being addressed related to farmers and their sufferings cannot be ignored. As per the NSSO’s 59th survey, about 40% of farmers dislike farming and would quit if they can therefore, finding of short-term and long-term solutions can severely impact food security.
  • Examine the impact it has on the condition of small and medium farmers.

Conclusion – Give your opinion on farm loan waivers and discuss the way forward. farm loan waivers act only as a temporary solution to the problems of farmers and it will not make them free from issues like decreasing farm income, debt trap or crop failures. The problems need creative engagement through which the surplus workers in the farming sector can be taken away to more productive sectors through education and skilling thereby making farming more profitable and sustainable for all stakeholders.

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