Bengaluru: The Kerala government on Wednesday approved a decision to increase the ceiling of farm loan debt eligible for waivers from ₹1 lakh to ₹2 lakh, in continuation of states offering budgetary support to farmers in distress, and culminating a long-pending demand from the public and the Opposition after the 2018 floods resulted in wide-scale damage on crops. The move was announced in an official press statement from the government after Wednesday’s Cabinet meeting.
The waivers will be offered through the state’s arm, the Agricultural Debt Relief Commission, a unique committee comprising bureaucrats and experts, who go from village to village, take petitions from debt-ridden farmers and grant them relief. The commission caters only to small farmers, whose annual income is less than ₹2 lakh, and has availed agricultural loans from cooperative banks.
Kerala is the latest in a series of Indian states that recently offered fresh relief or enlarged the existing pipeline of funds to support farmers, also fearing a political backlash. Karnataka, Punjab, Chhattisgarh, Rajasthan and Madhya Pradesh are some of the states that offered a farm loan waiver in the last one year.
In Kerala, farm distress had peaked after the 2018 floods, which resulted in a loss of ₹3,646.4 crore for the sector. The government’s move to increase the ceiling of farm debt waive-off amount to ₹2 lakh was first announced in March, but it was put on hold after running into tussles with the Election Commission over Code of Conduct in place for the Lok Sabha elections in May.
Meanwhile, banks started recovery procedures on farm credit defaulters, creating panic and pushing people to commit suicides. The Opposition, Congress, walked out of an assembly session on 10 June in protest against the government’s alleged inaction to alleviate the distress.
Ramesh Chennithala, Opposition leader in the House, has alleged that 18 farmers committed suicides in the last 18 months after failing to tackle their debts, while 2,961 individuals had to face recovery from the cooperative banks. “Recently, one farmer of Idukki had announced that he would be selling his kidneys to clear debts. What prompted him to say so?” Chennithala asked, reported regional newspaper Malayala Manorama.
After this, the government introduced a law that took out the power to attach property over credit defaulters in co-operative banks, the only ones where the state can exercise direct control on internal affairs. The crisis for Kerala, still, is about to get sharper— a moratorium imposed on banks against recovery of farm credit is expected to end on 31 July, and the government’s liaisons with Reserve Bank of India and state level banks to extend it until the year-end has not yet succeeded.