Lok Sabha Question No. 206 (STARRED), answered on 2018-01-02
Subject: Farmers' Parliament
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: M. B. RAJESH

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE, COOPERATION & FARMERS WELFARE

## LOK  SABHA STARRED QUESTION NO. 206

TO BE ANSWERED ON THE 2 ND  JANUARY, 2018

## FARMERS' PARLIAMENT

- *206.      SHRI M.B. RAJESH:

Will  the  Minister  of  AGRICULTURE  AND FARMERS WELFARE कृ ष एवं कसान कयाण ½ãâ¨ããè be pleased to state:

- (a) whether  more  than  150  farmers'  unions  in  the  country  had  organised  a  Farmers' Parliament  demanding  freedom  from  debt  and  adequate  remunerative  prices  for  their produce;
- (b) if so, the details thereof; and
- (c) the response of the Government to the demands of the farmers?

## ANSWER

MINISTER OF AGRICULTURE AND FARMERS WELFARE

कृ ष एवं कसान कयाण ½ãâ¨ããè (SHRI RADHA MOHAN SINGH) (a) to (c): A statement is laid on the Table of the House.

## STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (c)  OF  LOK  SABHA STARRED QUESTION NO. 206    DUE FOR REPLY ON  2 ND  JANUARY, 2018.

(a) to (c) : Yes, Madam. A Farmers' Parliament was organized under the umbrella of All  India  Kisan  Sangharsh  Coordination  Committee  (AIKSCC)  on  20.11.2017  in  New Delhi.    The  Government has received petition dated  20.11.2017 along with charter of demands from the Convenor, AIKSCC.  The two point charter of demands is annexed:

Regarding the farmers' demand for fair and remunerative prices, it is stated that the recommendations of National Commission on Farmers (NCF) headed by Dr. M.S. Swaminathan that the Minimum Support Price (MSP) should be at least 50% more than the weighted average cost of production has not been included in the National Farmers Policy.  Presently,  the  MSP  is  fixed  on  the  basis  of  the  recommendations  of  the Commission for  Agricultural  Costs  &  Prices  (CACP).  CACP  recommendations  in  this regard is based on objective criteria considering host of relevant factors and prescribing an  increase  of  at  least  50%  of  cost,  may  affect  inter-crop  parity  and  distort  market mechanism. However, the return over weighted average cost of production (A2+FL) for MSPs fixed by Government for 2017-18 is in excess of 50% in many crops with returns of  112.4%  for  wheat,  88.4%  for  rapeseed/mustard,79.6% for  masur,  78.8% for  gram, 66.9% for barley, 65.4% for urad, 64.3% for tur and 50.2%  for bajra.

To ensure remunerative prices for farmers, Government has taken several steps which  include  setting  up  of  procurement  centres  keeping  in  view  the  potential  in  the areas;  creating  awareness  among  the  farmers  of  the  MSP  operations;  encouraging decentralized procurement; adopting e-procurement system; engaging private players in certain    states to     participate in      procurement operations, implementing e-National

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Agriculture  Market,  promoting  Farmer  Producer  Organization  (FPOs)  etc.  In  addition, Government operates Price Support Scheme (PSS) to ensure that remunerative prices are paid to farmers. In addition, Government has taken various initiatives to increase farm  productivity  for  ensuring  higher  returns  to  farmers.    The  Government  has  also constituted an inter-ministerial committee to recommend appropriate strategy to double the income of farmers by 2022.

Regarding freedom from debt, it is mentioned that the Government is providing interest subsidy on short term crop loans. The Reserve Bank of India is not in favour of loan  waiver,  as  it  negatively  impacts  credit  and  recovery  climate  and  has  severe systemic consequences.

Towards  reducing  the  debt  burden  of  farmers  and  increasing  availability  of institutional credit to farmers, following major initiatives have been taken:

- i. With a view to ensuring availability of agriculture credit at a reduced interest rate to farmers, the Government implements the Interest Subvention Scheme (ISS) under which, in the case of prompt repayment, an interest subvention of 5 % is provided to the farmers for short term crop loans up to Rs. 3.00 lakh. Thereby reducing the  effective  rate  of  interest  to  4%  p.a.  for  such  farmers. Some State Governments infact also provide additional interest subvention, reducing the effective interest burden on short term crop loans to zero.
- ii. Government sets annual target for the flow of credit to the agriculture sector. Banks have been consistently surpassing the annual target.

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- iii. Reserve Bank of  India  (RBI)  has  issued  Priority  Sector  Lending  Guidelines (PSL), which mandate all Domestic Scheduled Commercial Banks to earmark 18% of their Adjusted Net Bank Credit (ANBC) or Credit Equivalent amount of Off-Balance Sheet Exposure (OBE), whichever is higher, as on the corresponding date of the previous year, for lending to Agriculture.
- iv. As per PSL guidelines loans to distressed farmers to repay non-institutional lenders are eligible under priority sector. Besides loans to stressed persons (other than farmers) not exceeding Rs. 1,00,000/- per borrower to repay their debt  to  non-institutional  lender  are  also  eligible  for  the  purpose  of  priority sector lending by banks.
- v. In order to ensure that all eligible farmers are provided with hassle-free and timely credit for their agricultural operations, the Government has introduced the Kisan Credit Card (KCC) Scheme, which enables them to draw cash to purchase agricultural inputs  such  as  seeds,  fertilisers,  pesticides as  well  as meet other agricultural and consumption needs. The KCC Scheme has since been simplified by providing the farmers with ATM enabled debit card based on one-time documentation and built-in cost escalation in the limit, etc.
- vi. To  bring  small,  marginal,  tenant  farmers,  oral  lessees,  etc.  into  the  fold  of institutional  credit,  Joint  Liability  Groups  (JLGs)  have  been  promoted  by banks. The  Government  also  promotes  formation  of Farmer  Producer Organisations (FPOs) in a big way to enable farmers to leverage economies of  scale,  not  only  for  agricultural  inputs  but  also  for  enhanced  marketing opportunities.

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- vii. Banks have been advised by RBI to waive margin/security requirements of agricultural  loans  upto  Rs.1,00,000/-,  vide  RBI's  circular  dated  18 th June, 2010.
- viii. RBI has issued  directions for Relief Measures to be provided by respective lending  institutions  in  areas  affected  by  natural  calamities  which,  inter  alia, include,  restructuring/rescheduling  of  existing  crop  loans  and  term  loans, extending fresh loans, relaxed security and margin norms, moratorium, etc. These  directions  have  been  so  designed  that  the  moment  calamity  is declared  by  the  concerned  District  Authorities  they  are  automatically  set  in motion without  any intervention,  thus  saving  precious  time.  The  benchmark for  initiating  relief  measures  by  banks  has  also  been  reduced  to  33%  crop loss in line with the National Disaster Management Framework.

## BRIEF OF DEMANDS SUBMITTED BY AIKSCC

## A. FAIR AND REMUNERATIVE PRICES

We must get fair and remunerative returns on our hard work. Government must ensure that we realise at least 50% over and above the total cost of production for all crops and other  produce  as  recommended  by  the  National  Farmers'  Commission.  This  would require  remunerative  prices  and  affordable  input  costs,  to  be  supplemented  by  fair livelihood  wages for at least 100 days per family per annum as per the MNREG Act. This includes:-

-  Correct  estimation  of  Cost  of  Production  as  per  the  recommendations  of  the Ramesh Chand Committee (March 2015) and with full calculation of labour time for each crop;
-  Declaration of Minimum Support Price for all crops and farm produce (including vegetables and fruits, minor forest produce, milk, honey, poultry and fish) to be fixed at no less than one and a half times the real Cost of Production (C2) after improvements mentioned above.
-  Ensuring that farmers actually receive this fair and remunerative price, through several  measures  described  below,  which  include  making  MSP  as  a  statutory right for all farmers.
-  Reduction  in the cost of production  for the farmers  through appropriate subsidies,  input  price  regulation,  production  incentives  and  support  for  low  or zero cost cultivation methods.
-  Sufficient  funds  for  effective  implementation  of  the  government's  statutory obligation under MNREGA with wages not below the Minimum Wages and social audit of the implementation.

## Annexure

## B. FREEDOM FROM DEBT

We demand freedom from debt in recognition of the farmers' need for a clean slate, in recognition of the fact that such debt is often the immediate trigger for suicides, and in acknowledgment  of  the  accumulated  debt  that  the  nation  owes  to  the  farmers.  We demand that  the  government should  write-off  all  outstanding  agricultural  loans  of  the farmers  from  all  sources  including  institutional  and  non-institutional  loans,  and  take measures to ensure that farmers do not fall back into the debt trap. This includes:-

-  Immediate waiver of the entire outstanding agricultural loans of all farmers, to be implemented in a single installment - ensuring that farmers are eligible for fresh crop loans in the same season. All care to be taken to ensure that this benefits the maximum number of farmers and keeps out non-cultivators.
-  The  waiver  to  cover  all  categories  of  banks  -  nationalized,  cooperative  and private - and should be backed by the Central as well as State governments
-  Debt  freedom  to  be  extended  to  settlement,  swapping  and  waiving  of  private (non-institutional) agricultural loans of farmers, including sharecroppers, tenants, agricultural labour, adivasi and women farmers.
-  Loan waiver to include credit to the  bank account equal to the amount  of crop loan repaid in the previous season, for those farmers who somehow managed to repay.
-  Freedom from debt to include effective  disaster  relief,  and  universal  and  zeropremium crop insurance to protect farmers from slipping again into debt trap due to crop losses from all possible factors.

-  Freedom from debt to include transition away from high-input agriculture to lowinput sustainable methods, reducing the need for debt.
-  Institutional  credit  facilities  to  be  extended  within  two  years  to  all  farmers including marginal farmers, tenant farmers, sharecroppers, women farmers and adivasis; Interest-free loans to be provided to all small farmers up to Rs.1 lakh.
-  Reform  of  banking  system  to  ensure  that  priority  sector  lending  goes  to  small farmers  and  their  collectives  rather  than  agri-business  companies  and  citydwellers, and to ensure that  the  banking system does not get exploitative with penal interest rates.

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