Gov't Leaves Farmers to the
Mercy of Moneylenders By
MAHOBA, May 9 (IPS) - There is no let up in
farmers’ suicides, say activists urging the Indian government to extend its
loan waiver offer to more agriculturists in western Maharashtra and central
Madhya Pradesh states where the agrarian crisis is most severe.
Datta Patil, co-ordinator of Yuva-Rural (rural youth), a non-governmental group
promoting low-cost, organic farming in Vidarbha, Maharashtra, says: "To
provide real relief in Vidarbha, the budget-waiver should be extended to
Finance Minister P. Chidambaram announced the cancellation of an estimated 1.2
billion US dollars owed to banks by farmers owning up to two hectares (ha) of
land at the beginning of the current budget session of parliament. An estimated
30 million agriculturists were expected to benefit, according to official
But most Vidarbha farmers "will get very little relief from the
budget," observes Patil. Almost all the farmers in Gaigaon village, Akola
district (one of 11 districts that constitute Vidarbha), are in debt. But they
own between 8 and 20 acres of land (1 ha=approx 2.46 acres), and hence cannot
avail of the government’s loan waiver.
Levels of malnutrition and hunger are very high in Gaigaon. Most families cannot
afford to buy cereals, pulses, vegetables or milk. Farmers have been driven to
sell and mortgage their lands.
Dilip Rao Dhote, the assistant village headman, says: "If things don’t
improve, some farmers may end up losing half their land." Nothing, he adds,
is more humiliating for a farmer than to become a wage labour on his own land.
What Chidambaram did not do was cover farmers who have borrowed money from
private moneylenders. Farm activist Nikhil Dey confirms that in most parts of
India loans from the village moneylender is the bigger cause of tension and
problem for rural households.
"The rate of interest charged is very high (compared to banks). The
government should reduce the loan amounts, and repay the moneylenders so that
farmers get complete benefit," Dey asserts.
In Atraarmaaf village, Mahoba district in the Bundelkhand region, prolonged
drought has brought extreme distress. Lal Kunwar, a widow, said her husband
Paramlal, 30, was killed by hunger and mounting debts. He had pleaded several
times for help, she said. Now the family of five has received no relief. They
live huddled in one room of their house, the roof over the rest has caved in
because there was no money for maintenance.
In an adjoining village, repeated crop losses and accumulating debt drove two
brothers to kill themselves in quick succession. Chandrapal and Krishnapal Singh
were unable to meet the basic needs of their families. Their neat, well-built
house built around a large courtyard suggests the family were comfortable till
recently. Their young widows, Saroj and Sheela, have been forced to become the
heads of their respective households. Between them they have six children.
Fighting back tears, Saroj, the elder of the two, says matter-of-factly:
"We can’t turn our back on these responsibilities." Adds Sheela:
"Our family owes money to a bank as well as private lenders."
At least 10,000 farmers are estimated to commit suicide in India each year,
after falling into debt. Most cases are reported from Maharashtra, Madhya
Pradesh and southern Andhra Pradesh and Kerala and Karnataka state.
Abhishek Mishra of Arunodaya Sansthan, an NGO in Mahoba district, explains that
until recently banks were resorting to the use of force for loan recovery --
rough tactics that led to farmers taking their own lives in some cases.
"Banks then stopped hiring local goons," he said, but "began
sticking a flag on the land belonging to indebted farmers. Once this is done the
farmer is prevented from cultivating his field. Farmers are very scared of
What farmers need is expansion of institutional credit, the prestigious Economic
and Political Weekly (EPW) editorialised, and not the loan waiver which is a
"one-shot benefit with no lasting value since the underlying causes of
agrarian distress will remain untouched."
Chidambaram’s write-off will instead affect expansion of institutional credit
to the farm sector, according to the EPW. "Inadequate institutional credit
(half of farm credit is still provided by private moneylenders) is a more
important issue than extreme indebtedness as made out by sections of a
campaigning media," the journal argues.
Farm activists like Patil and Mishra would like to see the government extend the
relief to farmers indebted to private moneylenders. The poorest of the poor in
India’s villages are totally dependent on an informal credit network. Banks --
both state-owned and cooperatives -- deal with customers with mortgageable
assets. Moreover, the government should have had separate concessions for
irrigated and non-irrigated land. The loan waiver should have covered all
farmers owning up to 10 acres (roughly 4 ha) of rain-fed land. At present, they
have been promised a 25 percent cut in the loan if they are able to repay 75
percent by Jun. 30.
Finance minister Chidambaram has announced a Jun. 30 deadline for the
implementation of his budget sop for agriculturists.
Shobha’s agriculturist husband Shridhar Uttam Bhyute committed suicide on Jan.
7, 2008. His younger brother, Subhash, says failed rains, falling agricultural
production, and rising costs of farm inputs forced his brother into debt. The
family has to repay debts owed to local moneylenders and the bank.
The family has heard nothing from the government. No relief has reached.
Shobha’s son who dropped out of school, has started working in a factory so
the family will not starve.
An activist of Yuva-Rural from Buldana district of Vidarbha (who asked not to be
named) said, "In our area, the most powerful local politician with contacts
that go all the way to Delhi (the Indian capital) is the one who is benefiting
from the debts of farmers.
"When farmers need a loan, they mortgage their land to him. He actually
profits from the increasing indebtedness of farmers. When they cannot return his
money, he grabs their land."
According to a 2005 door-to-door survey carried out by the government of
Maharashtra, one million farm households -- or five million people -- are in
"acute to moderate" distress in Vidarbha.
The following year, the federal government announced a "special
rehabilitation package" which covered the six most affected districts in
Vidarbha. But, according to official records, 1,414 deaths were recorded in the
region between April 2006 and March 2007.
Last month, the Comptroller and Auditor General (CAG) of India, in a report,
rapped the government for ‘’deficiencies noticed in the various components
of the (relief) packages, underutilisation of available funds, important areas
of agrarian distress not being covered under the packages, and coverage of only
a fraction of distressed farmers’’ in Vidarbha.
The CAG also charged the government with failing to educate farmers about their
rights. It noted that some 75 percent of farmers were unaware of the "ban
on illegal money lending" and continued to pay high interest rates despite
the debts being declared illegal.
Courtesy: Bharat Dogra & www.ipsnews.net