Print Friendly, PDF & Email

5) Repeated loan waivers may be in the interest of political parties but are not in the interest of farmers. Critically examine.(250 words)

Topic-Inclusive growth and issues arising from it.

5) Repeated loan waivers may be in the interest of political parties but are not in the interest of farmers. Critically examine.(250 words)

The hindu

Why this question

Farm loan waivers introduced recently by several state governments have been criticized time and again on many accounts. It is therefore necessary to analyze the perils of such schemes and what could be the best strategy to address the issue holistically.

Directive word

Critically examine- here we have to probe deeper into the topic,  get into details, and find out the causes or implications if any. based on our discussion we have to form a concluding opinion on the issue.  

Key demand of the question.

The question wants us to dig deeper into the issue, bring out the pitfalls and deficiencies of farm loan waiver schemes and express our opinion on the issue as to what should be done in this regard.

Structure of the answer

Introduction– write a few introductory lines about the  farm loan waivers introduced recently as well as in the recent past in many states of India. Mention that The NSSO Situation Assessment Survey of Agricultural Households (2013) shows that 52% of farming households are indebted, with rates as high as 89-92% in some States.


  1. Discuss how farm subsidies are not enough to address the farmers’ woes. E.g
  • A loan waiver is only an element of immediate relief. It is an acknowledgment that farmers have been pushed into debt due to the systemic failures of the government.
  • The burden on farmers on account of just three items (lack of compensation during drought and disasters, the failures of the crop insurance scheme, and the deficit due to prices falling below the announced Minimum Support Prices) runs to tens of thousands of crores every season.
  • Farm loan waiver does not cater to the vast small and marginal farmers who don’t have access to formal credit and are indebted to local money lenders etc.
  1. Discuss what should be the line of action to address the agriculture distress in a sincere and holistic manner. E.g
  • Guarantee access to institutional credit to not only big farmers but also small and marginal farmers, sharecroppers, tenants, adivasi and women farmers, and animal-rearers;
  • Registration of all cultivators and providing them Kisan credit cards
  • establish farmers’ distress and disaster relief commissions at the national and State levels, based on the model of Kerala Farmers’ Debt Relief Commission.
  • In addition to reforming the credit system, agriculture should be made profitable by ensuring fair remunerative prices, lowering the cost of cultivation, and promoting viable farmer collectives and sustainable models of agriculture.

Conclusion– based on your discussion, form a fair and a balanced conclusion on the given issue.