REACTION PAPER

CREDIT PROGRAM – NOT FOR THE POOR

Dr. Ernesr Feder, an agricultural consultant of various United Nations agencies and professor of
Agricultural development in different universities in Europe and Latin America noted:
The World Bank had formulated an “assistance program for the rural poor and persuaded the
Less developed countries to adopt it. Robert McNamara, former World Bank president noted
The worsening economic conditions of the rural poor due to the expansion of commercial farm
Enterprises. Despite such miserable circumstance of the poor farmers, McNamara believed
That small farmers could be a good market for the various agricultural inputs ( fertilizers,
Insecticides, pesticides, etc.) being manufactured and sold by the Multi National Companies
(MNC). He then proposed to extend more loans to the small farmers on conditions that they
Would use the agricultural inputs of MNCs and the seed varieties of IRRI (international Rice
Research Institute).

The MNCs are owned by richest countries in the world who are the biggest stockholders of
World Bank. While IRRI received generous financial assistance from WB.
The products of MNCs have not been bought by the small farmers as envisioned by McNamara.
Obviously, the credit program which is mainly funded by WB has been geared towards interest
Of MNCs which supply the equipment, fertilizers, pesticides etc., and not for the welfare of
The poor small farmers. 
Poverty reinforced by indebtedness forces the borrowers into a humiliating state of
Dependence and in some respect, peasants are worse-off than before.
Write your honest to goodness reaction/comment on the observation of Dr. Ernest Feder on
Credit program of the World Bank for rural poor.

J.R. Esmade
Professor