Waivers won’t wipe out farmers’ woes

The state government is considering a loan waiver estimated at around R35,000 crore, which could benefit about 30 lakh farmers. Representation Pic/Atul Kamble

Farmers may welcome the proposed farm loan waiver, but the relief comes at a time when another concern looms large, the possibility of an El Nino year that could disrupt the monsoon and affect rainfall.

For farmers dependent on the monsoon, even a slight shift in rainfall can make the difference between a decent harvest and financial distress. After last year's crop damage caused by excessive rain in several parts of Maharashtra, the prospect of another uncertain season is worrying both farmers and policymakers.

The Mahayuti alliance had promised a farm loan waiver during the 2024 election campaign. After coming to power, however, its leaders repeatedly stated that the decision would be made "at an appropriate time" whenever the issue was raised. This drew criticism from many quarters that the government was delaying the fulfilment of its promise.

The proposal now appears to have moved to a fast track. With farmers already under stress due to crop losses over the past year and concerns rising over a possible El Nino year, the government seems to be considering some form of relief. The renewed push for a loan waiver suggests that the administration is responding to growing agrarian distress and political pressure to deliver on its electoral commitment.

The Maharashtra government is now considering a farm loan waiver estimated at around R35,000 crore, which could benefit approximately 30 lakh farmers. For many farmers, such relief would provide immediate breathing space. But it also raises a familiar question: are loan waivers becoming the default response to deeper problems in agriculture?

Journalist P Sainath, a Ramon Magsaysay Award winner known for his work on rural distress, has often argued that loan waivers offer only temporary relief to farmers. As he once put it, "A loan waiver is a tool, not a transformation, a relief, but not the answer." His observation reflects a broader reality; while waivers ease immediate financial pressure, they do little to address the structural challenges facing agriculture.

Loan waivers are not new to Maharashtra. Successive governments have announced similar relief packages whenever agrarian distress has intensified. While such measures provide short-term respite, they rarely address the underlying issues that push farmers into debt repeatedly.

Agriculture remains one of the most uncertain livelihoods in the country. Farmers face risks from multiple directions, unpredictable weather, fluctuating crop prices, rising input costs, and limited irrigation facilities. In states like Maharashtra, where large parts of farming still depend on rainfall, a weak monsoon can quickly translate into crop losses and mounting debt. The past year itself highlighted the sector's vulnerability. Several districts experienced heavy rainfall that damaged crops, forcing the government to announce a R31,628 crore relief package. Many farmers are still recovering from those losses. The possibility of an El Nino year has now added another layer of uncertainty.

In such circumstances, governments often face pressure to step in. Ignoring rural distress can deepen economic hardship and even trigger social unrest. From that perspective, loan waivers function as an emergency relief measure during periods of acute crisis.

But the larger question goes beyond immediate relief. Repeated waivers also point to a deeper policy challenge. If the same solution has to be used every few years, it suggests that the fundamental problems in agriculture remain unresolved. At the same time, the cost of cultivation continues to rise. Seeds, fertilisers, pesticides, and electricity have become more expensive over the years. When farm incomes fail to keep pace with these rising costs, farmers increasingly rely on credit to sustain their farming operations.

This combination of uncertain rainfall, unstable incomes, and rising expenses creates a cycle that repeatedly pushes farmers into debt. Loan waivers may ease the pressure temporarily, but they do not break this cycle.

There is also the larger question of the state's finances. Maharashtra is already dealing with rising public debt, which is projected to increase to Rs 11,02,654 crore in 2026-27, up from Rs 9,73,989 crore in 2025-26. A farm loan waiver of this scale will add further strain on the state's budget and could reduce resources available for long-term investments in agriculture.

Loan waivers may be necessary during periods of severe distress, and governments cannot ignore the hardships faced by farmers. But such measures should be viewed as temporary relief rather than a lasting solution.

If Maharashtra wants to secure the future of its farmers, the focus must shift from periodic debt relief to building a more resilient agricultural system. Otherwise, the state risks repeating the same cycle, crop losses, rising debt and another loan waiver announcement every few years. Farmers do not need periodic bailouts as much as they need a system that ensures stable incomes and protection from the
risks of farming.

Sanjeev Shivadekar is political editor, mid-day. He tweets @SanjeevShivadek
Send your feedback to mailbag@mid-day.com
The views expressed in this column are the individual's and don't represent those of the paper.