Poll-bound Madhya Pradesh, Rajasthan unveil sops, farm loan waivers

Rajasthan and Madhya Pradesh, which go to the polls later this year, announced major concessions for farmers, including a farm-loan waiver and higher prices as they sought to curb rural distress.

Making a surprise announcement while presenting the Rajasthan budget, chief minister Vasundhara Raje, under pressure after losing two Lok Sabha constituencies and an assembly seat in recent by-polls, said her government had decided to waive up to Rs 50,000 of all short-term crop loans of small and marginal farmers (borrowed from cooperative banks till September 30, 2017) with an outlay of Rs 8,000 crore. She said all loan penalties and overdue interest of such farmers would be written off. 

In Bhopal, chief minister Shivraj Singh Chouhan announced a bonus of Rs 200 a quintal (100 kg) over the federally fixed minimum support price or MSP of wheat and paddy. In 2007-08, Chouhan had announced a bonus of Rs 150 per quintal of wheat. Successive gluts then prompted his government to withdraw it in 2015. The timing of that withdrawal wasn’t good; commodity prices fell sharply that year. Chouhan said the state will also waive interest (amounting to Rs 2,600 crore) on farm loans. 

Madhya Pradesh and Rajasthan witnessed farmer protests last year due to falling prices.

“Writing off penalties would put farmers back in the category of ‘outstanding’, rather than ‘overdue’ loans,” Raje told the assembly, meaning that farmers eligible for the scheme would no longer be labelled as defaulters. 

Chouhan’s announcements, made at a farmers’ convention at Jamboree Maidan on Sunday and in the state capital on Monday, comes barely two weeks days ahead of bypolls in Mungaoli and Kolaras assembly constituencies. 

The Raje government’s decision comes on the back of a 13-day farmers agitation in September last year led by the Left-affiliated All India Kisan Sabha in Sikar, a prominent onion-growing region. The protests had forced the Raje-led government to depute a ministerial team to negotiate with the farmers. 

With her announcement specifically mentioning small and marginal farmers, Raje immediately came under fire from farmer groups.

“The agreement signed with us clearly stated that loans of all farmers would be waived off, not just small farmers. Small farmers with loans are not more just 2%. The government has cheated us,” said Amra Ram, a leader of the All India Kisan Sabha. 

With inputs from Zia Haq