Credit guarantee fund for ryots’ coop bodies

By TheHindu on 19 Jul 2017 | read

A Credit Guarantee Fund to farmers and their cooperative societies akin to those available for the industry is the immediate need of the hour besides other multiple interventions to improve incomes of the small and marginal farmers, argues a voluntary organisation working on farmers’ issues.

“Farmer’s cooperative societies tried to intervene by purchasing and stocking up when red gram prices crashed. But their efforts fell through as they could not get credit without providing non-agricultural assets as collateral guarantee,” pointed out Executive Director G.V. Ramanjaneyulu of Centre for Sustainable Agriculture (CSA).

The “30% tax on farmers’ cooperative societies” was a big dampener and just like the IT sector, there should be a tax holiday for farmers’ cooperative societies to get them into the market system, he suggested, at a recent workshop on ‘Bangaru Telangana and Sustainable Development Goals’ attended by government officials and agriculture experts.

While the proposed Rs. 4,000 financial assistance per acre to be extended to farmers by the Telangana government was welcome, it would do well to adopt Karnataka’s model of having a State-level price mechanism to compensate farmers if prices fell below the floor price. Meagre farm incomes as against rising cost of living, lack of support systems for credit access or for marketing the produce, high cost of production and no commensurate support prices have resulted in growing debt burden and farmers’ suicides, observed Dr. Ramanjaneyulu.

The government, which brought out agricultural action plans, should also be submitting review reports and data related to how many farmers got the credit and minimum support price etc., should be kept in the public domain. And, when prices of vegetables like tomato suffer wide variations from Rs. 1 a kg to Rs. 100 a kg, States should not brook delay in pushing for “one country, one market” to benefit both farmers and consumers.

Farmers have been cultivating only three to four main crop varieties across all areas increasing the risk factor as all areas would not be suitable for all crops, therefore cropping pattern changes has to be crucial. For instance, cotton being cultivated in 40 lakh acres this season could be a risky proposition. Same goes with paddy, a water intensive crop, he says.

Dr. Ramanjeyalu also alludes to the fact that TS accounted for the highest fertiliser consumption in the country which means the farmers’ cost of production has only increased even as the soil health took a hit.