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29 MAR 2005
GUARANTY FOR PRICES
It is a responsibility of the Government to help farmers to earn surplus over their labour and expenditure. Present system offers a minimum guarantied price as approved by Lok Sabha and or Vidhan Sabha. There are many drawbacks in present system and hence, a new system must be evolved.

Solution of this problem lays in making farmers self reliant for storage of their produce till the produce gets adequate price. Therefore it is necessary to make available adequate resources to the farmers for proper storage and their own maintenance till farm produce is sold. This needs ready cash on loan with low interest rates.

Construction of storage facilities need money and more than that maintenance of the storage facilities need heavy efforts. Government may not be in a position to construct and maintain storage facilities. Also it is not desirable that the Government assume this responsibility directly. However, farmers can obtain loans from banks and construct right type of storage in their own villages. Government should help in getting these loans at low interest rates. Government should offer to pay part of interest direct to banks. Such a share should be available from date of completion of the storage facility i.e. from the date the facility is put in use. Payment of government share of interest should be for a specific period say 3 years. Thereafter the farmers should pay full interest amount to banks. Provision also may be made to recover amount paid by the Government toward interest after certain period of time say, 5 years. The basic aim should be to make the farmer self reliant and not a beggar.

While constructing storage facility community storage complex should be encouraged. Farmers may make co-operative society preferably for the whole village and construct facilities in one place. There may be secured partitions and it may be divided in units for each of the farmers. There may be some centralised facilities like anti-rat guards, cold storage plants, security etc. However, each of the farmers must have his own secure place for his own produce.

After making storage facilities to farmers, next requirement is to make them strong with liquid cash from time to time for their own maintenance and inputs needed for the next crop. Banks should offer loans with security of farm products. Requirement of loan amount may be decided based on principle of ‘Maximum’ Farmer does not require entire amount at one instant. Necessity arises on more than one occasion. So payment should be made at different stages agreed between farmer and the bank. A procedure may be decided for this purpose and followed. There may be a requirement of bankers establishing their branch in every village or cluster of villages within a small distance say 2 km. Such a branch must know and control transactions from the storage. Farmer must pay part of the loan and interest based on the percentage of the material sold by the farmer at any time during life of the loan.

Government also should help farmers to decide on which crops they should select during a year. Farmers keep on producing sugarcane and cotton simply because they know they can sell these to government at assured price. Political parties take advantage of the situation to push through party propaganda. Political parties are in dire need of simpler problems to show off their concerned towards their vote bank.

Government is taking high risk and avoidable responsibility in offering guaranteed price for farm products. Present system provides clutches to farmers, but is not useful in making farmers self reliant. A view should be taken to find a long lasting solution rather than disaster help.

This way Government shall help farmers to become self reliant with minimum risk on part of the Government.