The Hindu Business Line : Gathering storm of farm revolt

The indebted farmers have tried all possible means of redressing this chronic and complex problem. That they are at their wits’ end is clear from their symbolic sinking of loan documents at Rameswaram.

Sharad Joshi

When most Indians were celebrating the beginning of the year 2008, over a lakh of farmers from all over the country were bidding goodbye to 2007 — the worst year the Indian peasantry has ever experienced, leaving a trail of thousands of suicides.

Symbolically, they sank the loan documents in the sea and took an oath to finish their longstanding indebtedness by the end of 2008. The farmers are convinced that the loans are both illegal and immoral, caused as they are by the anti-farmer policies of the government, right from the time of Independence.

On the call given by the All India Kisan Coordination Committee (KCC) to all the mainstream farmers’ organisations in the country, farmers — men and women — from all over the country gathered at Rameswaram in Tamil Nadu where the Arabian Sea meets the Indian Ocean, on December 31, 2007, and sank the documents relating to their loans.

The farmers gathered there were a desperate lot. They had tried, for the last 25 years, every possible way of bringing to the notice of the nation and the world the iniquity of the whole situation. Alas! Even the suicides by over 1,50,000 farmers since 1995 had failed to awaken the conscience of successive Governments, despite the avowed goal of inclusive economics.

Farmers from Punjab, Haryana, Uttar Pradesh, Bundelkhand, Madhya Pradesh, Gujarat, Maharashtra, Andhra Pradesh, Karnataka, Tamil Nadu and Kerala managed to reach Rameswaram to participate in the rally, in spite of all the hardships of the long journey, worsened by the harassment of the Police and the Railway officials, in the hope that this would end the long-fought struggle, right from 1984, for liberation of the agricultural community from the burden of immoral and illegal agricultural debts.

Since 1984, the farmers in different States have been agitating for a reduction of the prices of inputs and, more importantly, for securing remunerative prices for their produce.

After agitating for several years for the prices of onion, sugarcane, tobacco, milk and paddy, there was a realisation that these produce-by-produce sequential agitations could be an unending process and that it was necessary to attack the root of the problem.

Crippling burden

Getting remunerative prices for their produce was good for the future. However, unless the backlog of accumulated loans was cleared, the colossal burden of interest charges itself would frustrate the movement for remunerative prices and could become a “chicken and egg” problem.

There was a realisation that despite differences of climate, region and crops, it was indebtedness that formed a common bond between all Indian farmers who started every year with the renewed hope of being able to liquidate their debts, only to find they were worse off at the end of it.

There was nothing legal or moral about this vice-like trap of indebtedness. The government gave loans through credit institutions, on the one hand, and, on the other, depressed agriculture prices, making it impossible for the farmers to repay the loans. Even under the Indian Contract Act, the contracts of agricultural loans are void. The aggregate amount owed by the farmers to the credit institutions represents only a fraction of the losses caused by the government to the farmers.

The farmers had recourse since 1984 to resistance of coercive recovery of loans as also of seizure of lands. The call generated massive response. However, the method did not protect certain categories of cash-crop farmers, the recovery of whose loans was made under the APMC Act in certain States.

Resistance to coercive recovery was evidently not sufficient to protect the farmers. Further, there was a realisation that indebtedness was the hallmark of all honest farmers and that only those who had non-agricultural incomes, legitimate or otherwise, were in a position to repay the loans. A popular slogan came up, “be proud of your debts; only the dishonest do not have them”.

Insolvency petitions

Another massive agitation was launched emulating the example of the traders and the industrialists who file insolvency petitions whenever they find their businesses cannot be salvaged. Lakhs of farmers filed insolvency petitions.

The Supreme Court also passed an order that no coercive recoveries could be instituted against farmers whose insolvency petitions were pending. On the flip side, the insolvency petitions also made the farmers ineligible to receive fresh loans.

The publication of the data on agricultural subsidies submitted by the Ministry of Commerce to the World Trade Organisation (WTO) avoided reference to the karjmukti (freedom from indebtedness) moment. In these statements, the government had admitted that Indian farmers suffered under a system of negative Aggregate Measurement of Support (subsidies) of the order of 83 per cent and that the loss to the farmers in one single year of 1996-97 was Rs 1,13,000 crore.

These astronomical figures did not convey to the ordinary farmer the enormity of the iniquity involved. The farmers organisations, therefore, collected data of crops taken by individual farmers over the past 10 years and calculated the amount of loss to them according to the statistics submitted by the Government itself.

The farmers were given a certificate that mentioned the amount owed by the government to them. Farmers, in recovery cases, produced the certificates in the courts. No court cared to question the veracity of the certificates.

Chronic problem

A further provocation for raising the issue of karjmukti was provided by a directive of the Supreme Court that the bank should stipulate only annual recovery from the farmers to coincide with the farmers’ income cycle and that there should be no charging of compound rates of interest, unless the amounts become overdue.

The Reserve Bank of India communicated these orders to the banking institutions. However, almost all the co-operative credit institutions disobeyed these orders.

The farmers’ organisations have collected the loan account statements from thousands of farmers and are preparing a comprehensive writ petition for the Supreme Court. In the meanwhile, the continuing suicides only reflected the farmers’ increasing desperation.

No one can say the farmers did not try all possible means of redressing this chronic and complex problem. That they are at their wits’ end was clear from the event at Rameswaram.

If the forthcoming Budget does not make clear provisions for write-offs of farmers’ loans, there is every likelihood of a farmers’ revolt breaking out.

(The author is Founder, Shetkari Sanghatana, and Member of Parliament (Rajya Sabha). Feedback can be sent to sharad.mah@nic.in)

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