The WTO has made the Indian government sit up and take notice of the small farmer who has actually been sheltering our economy for quite some time, preserving our natural environment and creating food for us with limited resources. The farmers of Brazil and Mexico have already realised that the WTO Design could be a bundle of opportunities if they come together and decide their own strategies for fuelling growth. The WTO Design has basically provided a challenge for poor farmers worldwide and especially in India, in the following six areas:

• Economy of scale for processing, storing and distribution
• Seed development, protection and enrichment
• Allied activities to support uncertain agricultural income
• Infrastructure facilities at an affordable cost
• A more civilised society flourishing in the villages
• An equitable share in national income, while competing with other value-drivers like the manufacturing and service sectors.
  
  

  Small and poor farmers can convert challenges in these areas into manageable opportunities provided ‘agricultural credit’ is redefined. A radical change is required simply because the WTO Design is merciless and provides neither breathing space nor a protected regime. A few quantitative relaxations, notional subsidies and fiscal advantages will not be enough to ensure survival and growth for small Indian farmers. The overall impact of India’s agricultural credit system will have to be assessed, using the following radical parameters:
• Real net savings and real growth in the individual wealth of a small farmer
• Rate of sustainability in annual earnings and annual spending on improvement in core competencies of small farmers
• Rate of reinvestment of agricultural savings in agro-based activities
• Ratio of agricultural earnings and other earnings, as compared to the respective credit apportionment
• Real value addition created by an agricultural activity, per rupee invested; as compared to the value addition contributed by other activities
• Consumption of different environmental resources by the villages compared to the cities and towns
  
  A few more radical parameters could be further developed if the government allows the use of sensitive information about its spending on rich farmers and poor farmers separately. Unfortunately, national income accounting has not been rationally used to trace excessive consumption of agricultural credit by the rich farmers and the so-called intermediaries in the agricultural chain. There is no study available on the real impact of agricultural credit societies on the self-supporting sustenance of Indian villages.
  
  A radical change in agricultural credit for poor, small farmers demands a radical change in the institutional organisation of these farmers’ activities. Indian farmers will have to come together, under an umbrella of ‘co-operative corporations’, to achieve the advantages of both, socialist purpose of cooperation and entrepreneurial purpose of corporatisation. Individual Indian small farmers always like to maintain their ownership and identity. This need not be a hurdle in rationalising the credit system for them, if they form co-operative corporations. Such organisations can be much more convenient for bankers too, as they can easily identify and assess the credit worthiness of such small borrowers, based on identifiable assets, processes, programmes, policies and products.
  
  

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