The Telegraph
Since 1st March, 1999
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Ajit sows the seeds of hope for drought-hit farmers

New Delhi, Nov. 16: The government is considering a proposal to waive interest on crop loans to farmers in 14 drought-affected states, agriculture minister Ajit Singh said here today.

Just two days ago, Prime Minister Atal Bihari Vajpayee had announced that recovery of interest on crop loans would be suspended for this fiscal to ease the burden on farmers and plantations whose fortunes have been blighted by this year’s poor monsoon.

“Although the deferment of loans-cum-interest has been announced by the government, a complete waiver of the interest on loans taken by farmers in the drought-hit kharif season is still pending before the Cabinet and a decision will be taken shortly,” Singh told reporters on the sidelines of a seminar organised by Ficci to discuss ways to make Indian agriculture competitive.

The suspension of interest recovery would have made it obligatory for the farmers to pay these dues at a later stage; the waiver automatically absolves them of the burden for this fiscal. If the interest waiver is cleared, it will mark a major improvement of the pre-poll blandishment to the farming community — a major vote-bank — in many of these states that go to the polls next year starting with Gujarat on December 12.

The government has already identified 14 states as drought-affected this year. They include Rajasthan, Punjab, Delhi, Gujarat, Chattisgarh, Haryana, Uttar Pradesh, Madhya Pradesh, Himachal Pradesh, Andhra Pradesh, Karnataka, Tamil Nadu, Orissa and Maharashtra.

Singh also said there was a need to provide protection to Indian farmers through high tariff walls and higher subsidies. He said the minimum support price — a guarantee of government purchase to prevent distress selling — should continue.

Singh said, “By keeping our tariff and bound rates high, we will be able to protect our farmers. This should be done because other countries will not give us market access easily.”

Outlining the most critical problem that needs to be tackled in the new round of WTO negotiations, Singh said, “World commodity prices are going down in the last 10 to 15 years because of domestic subsidies given by developed nations. Since the prices do not reflect the cost of production, domestic subsidy has become a big worry.”

He said that next week the final position for starting discussions for WTO on agreement on agriculture will be given. He added, “There are a lot of misapprehensions and misplaced hopes about WTO. He also referred to the recent meeting of all agriculture ministers, NGO’s and political parties where the general consensus was that there is no way out but to live under the existing WTO norms.

Singh stressed, “We cannot get out of WTO as we can’t live without it. And let us get it out of our minds that had there been no WTO, things would have been very hunky-dory.”

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