If the UP government fulfils its farm loan waiver promise, banks are likely to take a hit of Rs 27,420 crore and the scheme will lead to some stress on the state’s fiscal arithmetic, warns a report.
The BJP had in its UP election manifesto promised to waive farmers’ loans if elected to power. The party and its allies won a whopping 325 seats in the 403-member House.
An SBI Research report today said schedule commercial banks together had an outstanding farm credit of Rs 86,241.20 crore in UP with the average ticket size of Rs 1.34 lakh, as of 2016, most of which is to small and marginal farmers.
According to RBI data (2012), 31 per cent of the direct agriculture finance went to marginal and small farmers (landholdings upto 2.5 acre).
“Taking this as a proxy for UP as well, around Rs 27,419.70 crore will have to be waived off in case the farm loan waiver scheme is implemented for the small and marginal farmers, for all banks,” the report said.
As per the Socioeconomic and Caste Census of 2011, 40 per cent of rural UP households are engaged in cultivation. When it comes to landholdings, 92 per cent are marginal and small farmers in the state, according to the 2010-11 Agriculture Census.
Syngenta, the Swiss seeds and crop protection giant, said it has rejected an unsolicited offer from Monsanto of the US that valued its shares at almost $46bn.
The Swiss company said the Monsanto proposal valued it at SFr449 per share with approximately 45 percent in cash.
Explaining its reasons for the rebuttal, Syngenta said:
The offer fundamentally undervalues Syngenta’s prospects and underestimates the significant execution risks, including regulatory and public scrutiny at multiple levels in many countries.
Michel Demaré, Syngenta Chairman, added:
Monsanto’s proposal does not reflect the outstanding growth prospects of Syngenta’s integrated strategy and the significant future value potential of the company’s crop-focused innovation and market leading positions.
He argued that the company’s current valuation had been unfairly reduced by a recent sharp rise in the Swiss franc, but said:
Recently launched new products are achieving rapid sales growth globally as growers demand the latest technologies, and we have a strong pipeline of innovative crop protection products in development, which have total peak sales potential of over $3 billion.