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21 Mar 2019·
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India Looks up to KALIA for Takeaways

What  Country  Should Learn from Odisha’s 'KALIA'- a better alternative to farm loan waivers

Bhubaneswar: At a time the poll is round the corner and the Modi government, which is all set to woo voters with the freebies and populist measures, may announce a holistic or selective farm loan waiver, however, it could be the “worst solution” to alleviate farmers’ distress.

Considering the farm distress and the lower food inflation resulting in lower revenue generation for the farming community, the central government may decide on a farm debt waiver scheme, holistically or selectively in some states.”

The rising farm distress has prompted many states to look for alternatives to provide relief to farmers, with many chief ministers announcing loan waivers and some implementing major schemes. Odisha Chief Minister Naveen Patnaik is showing the country a new way under 'KALIA' scheme, which is expected to provide financial, livelihood and cultivation support along with insurance support to small, marginal and the landless farmers. But the crucial question is - is the scheme a better alternative to farm loan waivers? Many opines that KALIA could  the game changer for farm sector. 

KALIA stands for "Krushak Assistance for Livelihood and Income Augmentation- A Path Breaking Solution for farm sector.

This scheme is progressive and inclusive. It covers 92% of the cultivators, loanee as well as non-loanee farmers, share croppers (actual cultivators) and landless agriculture labourers. It also specifically takes care of vulnerable agricultural families identified through Gram Panchayats, and makes crop loans available at 0% interest.

5 major features of this scheme that could benefit farmers:
In order to ensure that the farmers don't fall again into the debt cultivators for trap, this component of the Scheme will be implemented from the cultivation  year, 2018-19 Rabi onwards to take care of the initial investment needs of every small a marginal farmer. Under this component, support will be provided for cultivation to the small Et marginal farmers by way of a grant of Rs. 5000/- per farm family per season for purchase of inputs like seeds, fertilizers, pesticides, towards labour Et other investments in the field operations based on the farmers' choice for the crop season. Thus in a year, all the small and marginal farmers will receive Rs. 10,000/- for Kharif t Rabi, combined.

This component is not linked to the extent of land owned and thus is more progressive in favour of all the small & marginal farmers. Out of the 32.46 lakh cultivators dependent on agriculture, 92% (i.e. 30.176 lakh) are small Et marginal farmers. It is important to note that this assistance for five cropping seasons spanning 2018-19 to 2020-21 so as to ensure comprehensive coverage. About Rs. 3016 crores will lie required annually for this component of the Scheme.

2) Assistance for Livelihood: Financial Assistance of Rs 12,500 will be provided to each landless Agricultural Household for agricultural allied activities like for small goat rearing unit, mini-layer unit, duckery units, fishery kits for fisherman, mushroom cultivation and bee-keeping, etc.

3.    Financial Assistance to vulnerable agricultural households

Vulnerable cultivators and landless agricultural labourers will get financial assistance of Rs 10,000 per family per year to enable them to take care of their sustenance. The vulnerable cultivator and landless agricultural labourers those who are in old age, having disability or disease and are vulnerable for any other reason.

4.    Life insurance support to cultivators Et landless agriculture labourers:

Life Insurance cover of Rs.2,00,000/- at a very nominal annual premium of Rs. 330/- for all savings bank account holders aged between 18 and 50 years. Government of Odisha will bear the farmer's share of annual premium of Rs.165.  personal accident cover of Rs. 2,00,000/- at a very nominal annual premium of Rs. 12/- for all savings bank account holders aged between 18 and 50 years, Out of Rs. 121-towards premium Rs. 6/- is the farmer's share, which will be borne by the Govern-ment of Odisha. From age 51-70 years the entire amount of Rs. 12/- towards premium will be borne by the Government of Odisha.

5.    Interest-free crop loan

Vulnerable landless labourers, cultivators and agricultural families identified by Gram Panchayats will be provided with crop loans up to Rs 50,000 made available at 0% interest.
Why Rest of the Country must listen to Odisha Chief Minister Naveen Patnaik
With KALIA, Naveen Patnaik has refused to write off farm loans. Meanwhile, he is helping maintain repayment discipline in the banking system.
Loan waivers penalise honest farmers who repay on time and can discourage them from doing so. According to Naveen Patnaik, of the 32 lakh cultivators in Odisha, only the richest 20 lakh have farm loans, and they should not be the main beneficiaries of an anti-distress programme.

If Odisha Government implements Kalia model successfully, it would be a path breaking solution for the farm sector, that the entire country may follow the Naveen Patnaik foot step.