The Finance Ministry has asked all nationalised banks to prepare new products for providing timely credit to farmers as per their specific needs, besides seasonal requirements. While various products are discussed and would be finalised by the banks concerned, their proper implementation depends on proper categorisation in the farm sector so that the needy farmers — particularly medium, small and marginal — get the expected benefits.
What is the situation at present? Landlords with political links have cornered a large share of policies meant for the farm sector.
Those with hundred or more acres of land fight elections under the banner of political parties, or as independents. Policies do not trickle down to the rest of the rural populace.
A similar situation prevails in industry. Large corporates have inherited assets from their ancestors, the exercise of power and privilege being all-too-evident.
Large companies have enjoyed the benefits of tax concessions, export subsidies and ample credit. Their loans are waived or restructured, as is borne out by data released to the public by the All India Bank Employees’ Association from time to time.
Land-owners and industrialists have been accorded priority treatment in formulating policy. The trouble is that the rest continue to remain where they are.
INDUSTRY CATEGORIES
The situation has, however, been remedied to some extent in the industrial sphere. In order to ensure the disbursement of credit to industry along more equitable lines, the industial sector has been categorised into micro, small, medium and large or big industries.
According to this, ‘micro’ is an entity with land and machinery worth Rs 25 lakh, ‘small’ with land assets and machinery worth Rs 25 lakh to Rs 5 crore, medium comprises those with assets from Rs 5 crore to Rs 10 crore, and large Rs 10 crore or above.
This categorisation has helped the Union and State governments as also banks and financial institutions to provide a boost to all-round development and creation of employment opportunities for a technical workforce.
FARM CATEGORISATION
A similar system of categorisation would help in directing credit and policies to marginal, small and medium farmers.
The definitions being followed in revenue administration and other sectors like banking and financial institutions are ad-hoc in nature, without any fool-proof measurement of land assets and the relevant categories.
The farm sector may be carved out into the following categories: micro or marginal, small, medium and big farmers. Farmers with three hectares of land bagait (with water availability) and six hectares jirait (without water) may be included in the marginal or micro category.
Farmers with 5 hectares of land bagait and 10 hectares jirait can be termed as small, while those with 10 hectares of bagait and 20 hectares of jirait can be termed as medium. The large or big farmers will be those with more than 20 hectares of bagait and 30 hectares of jirait land.
If such or similar categories are fixed, policy decisions which are more beneficial to marginal and small farmers will be duly implemented. Subsidies, credit facilities as also fair prices of farm products based on cost of production will be properly ascertained.
In order to expedite the process of categorisation, agriculture should be included in the Central List or Concurrent List, instead of the State list. The Government will then be quite free to provide facilities directly without being solely dependent on States for implementation of projects and programmes. States can be subject to periodical assessment by the Centre to ascertain whether rural development projects with adequate financial assistance are properly implemented.
With such measures in place, agricultural development will gather momentum. The employment opportunities so created in rural areas will reduce migration to urban centres and the attendant congestion in cities.
(The author is a Kolhapur-based journalist.)