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Why KALIA may be better option than loan waiver in supporting big, small farmers

-Financial Express

Even as loan waivers are known to help a small number of farmers, Odisha has come up with a farmer-centric scheme which assists farming on a large and secular scale. It comes at a time when a debate on validity of loan waiver is being discussed across the country. KALIA — a farmer-specific scheme launched by the state — includes payments to everyone from big farmers and landless cultivators to farm agricultural labourers.

The scheme name abbreviated for Krushak Assistance for Livelihood and Income Augmentation, launched last month, includes payments to encourage cultivation and associated activities. It completed its first phase of registration on Tuesday.

“Unlike a loan waiver, (through which) banks appease a few farmers, KALIA’s main targets are rural activities as a whole. We will support farming on a small scale, sharecropping, fishing, animal herding, which are not covered under bank loans, but are caught in debt traps set up by local moneylenders,” an Agriculture Department official told The Indian Express.

The credit available to the farmers is reduced through farm loan waivers, income support in form of this scheme could help to make a repayment or at least activate a bank account which can then receive a loan, he added.

What is KALIA all about?

The scheme provides support of Rs 10,180 crore to cultivators and landless agricultural labourers over the coming three years till FY21. The state government expects the scheme to benefit 92 per cent of the farmers in the state. The farmers will receive Rs 10,000 per family for cultivation and Rs 5,000 will be paid separately in the kharif and rabi seasons, for five cropping seasons between FY19 and FY22.

“The scheme has been made equitable, looking at the best-case/worst-case scenario problems of a small farmer. At the same time, we don’t want to target only certain farmers and leave out others; whether you own one acre or five acres, you get the same financial assistance,” The Indian Express reported citing the Agriculture Department official.

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