Karnataka announced farm loan waivers amounting to Rs. 50,000 per farmer for loans from Cooperative Banks. Earlier, Punjab government announced waivers up to Rs. 2,00,000. Maharashtra Government waived off loans completely for small and marginal farmers. It all started with Tamil farmers protesting for waiver of loans, but they were in for a rude surprise when UP CM Yogi Adityanath announced waiver up to Rs. 1,00,000 for his state.
Alright, let me clear out few things here before you read further:
- I am not against farmers getting financial assistance to help with their plight, caused by bad monsoon and drought.
- My analysis is based on what I have read in news, my own sources who know a few things in this matter and data available in public on our country’s finances.
So why I am writing about it?
You know, many of you who are reading this, pay taxes. Heavily at that. Income Tax at various slabs, and many more via indirect taxes on things that we consume. I pay a heavy amount as well, and it pinches me. It pinches me to think if I lose my job tomorrow, can my home loans be waived off? Or my personal loans?
I can see many of you laughing. But ponder on it, and you will realize that things are not right with how India manages its own finances. These farmers likewise pay barely any taxes and whatever they pay is minuscule. Fair to them, they do not make hell a lot of money themselves. But their income taxation is not what is should be ideally. In this post, I am also talking about how much they themselves make for the hard work they put together.
Idealists would have me plastered into wall for asking farmers to pay – but truly, anyone who makes money should pay taxes.
It is true that farmers do not make enough, and you know it. You have heard it all around. So if a farmer, who puts his blood and sweat out to make food for us does not earn enough, who does?
Farmer’s don’t fetch enough for their produce
The middle men make the most of a farmer’s produce, and that is what is hurting farmers. They buy the produce at cut-throat prices, and sell it at almost 60% margin. You will hardly hear noise in media or elsewhere from these middle men on any major economic impact in this country. Should that not surprise anyone of us?
Our economy being predominantly agrarian, it should not be difficult for a farmer to make more than enough money to survive his family with decent level of life. But truth is far from that. Very few farmers, who have do harvest a lot of crops and have diversified their farm bases make good amount of money. Small farmers do not. Wafer thin margins on their hard work ofter leave them poor.
What should be done?
To ensure the root of the evil is managed, government should review the process of farm produce being sold. Today we have government collection centers where produce is sold at market prices, however those centers are far off, centrally located.This prompts small farmers to approach middlemen.
Monitor middlemen. It is easier said that done. Since majority of transaction happen with cash, there is no trace of purchase v/s selling price for farmer. Introducing a singular, digital mode of payment can ensure this is tracked and appropriate taxation can also be recovered that gets lost due to unrecorded transaction.
And you, can try to procure more locally or from big malls that do buy produce direct from farmers.
Help a farmer!