Almost two years since the Punjab Government completed the loan waiver of Rs 4,603 crore to the targeted 5,61,390 farmers, most of them have once again taken loans and remain trapped in the cycle. The state’s per capita farmer indebtedness continues to be amongst the highest at Rs 80,000-1 lakh crore, as does the farmer suicide rate. Since 2017, after the scheme was announced and later rolled out, nearly 1,700 have ended their lives.

Even as the government looks at expanding the scheme to landless farmers and agriculture labourers, questions are being raised about its efficacy. Farmers and farm union leaders, who are now fighting a different battle (three farm laws), and economists are unanimous in their opinion that the scheme has facilitated only limited relief. They say though it did benefit the small and marginal farmers, it may not be a decisive factor when they vote.

Agriculture Debt Relief Scheme

Rolled out in january 2018

It aims at providing loan waiver up to Rs2 lakh for small and marginal farmers, those who have taken loan from public sector banks, cooperative institutions, commercial banks. Initially, the scheme was to cover 10.25 lakh farmers with Rs10,000 crore outlay

Eligibility criteria

Marginal farmers with less than 2.5-acre land and small farmers owning 2.5-5 acres. If he is a govt employee/ pensioner/ income tax payer, he’s ineligible
These conditions were introduced later, reducing the number of intended beneficiaries considerably

Fund management

The Punjab Mandi Board raised a loan of Rs3,000 crore by pledging its future income with banks in 2017
A cess of 1% was imposed on purchase of foodgrain to raise money for the scheme

The downside

Punjab’s per capita farmer indebtedness still among the highest at Rs80,000-Rs1 lakh crore
Farmer suicide rate still high; 1,700 have ended life since 2017
75% suicides because of inability to repay loans
Rural indebtedness of farmers up by 12% in last two years
40% of loans have been taken from arhtiyas/ moneylenders, making farmers ineligible for the scheme