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This Article is From Feb 27, 2010

Budget 2010: Relief in farm loans no good?

Pursaini Village (Uttar Pradesh): Has the Budget brought cheer to the agriculture sector? Well, small farmers in Uttar Pradesh are not overly enthusiastic about the new provisions in the Budget; many say the allocations won't translate into better living or better crops.

Mohammad Shakeel reaped a bumper crop last year; he took a loan and bought a tractor. The loan is high-risk for a small farmer like him.

So, he should be happy now that the Budget has given a relief in farm loans - reducing the interest rate to a five per cent from the earlier seven per cent.

"It's impossible for a farmer to get a government loan. The formalities involved are so rigid and long-winded that by the time a farmer can meet them, the sowing season passes. So he is forced to take loans from private moneylenders who charge at least 15 per cent interest. So even if the government reduces the interest of farm loans to one per cent, it's no use to us because we can't get these loans in the first place," he said.

Jaswant Singh can be called a prosperous farmer as his land is 10 times the size of Shakeel's. Also, he has no loans to pay off.

But even to him the increase in diesel prices has come as a shocker.

"As diesel becomes expensive, the farmer is going to get badly affected because both ploughing and irrigation depends on diesel," said Jaswant.

He said that this fuel price rise is going to prove tough, as already the steep food inflation has ruthlessly cut into farmers' incomes.

"We sell pulses at the wholesale price of Rs 30 a kg. When we have to buy some to eat, it costs us Rs 90 per kg. The farmers are dying," Jaswant said.

Year after year, the Budget makes certain provisions for the agricultural sector. But at least here in Uttar Pradesh the biggest problem facing the farmers still lies in the basics like the timely acquisition of seeds and fertilisers for which there is no redressal.

No wonder then that agricultural experts say that it may now be time for another Green Revolution.

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