(Report) Gov't Leaves Farmers to the Mercy of Moneylenders By Bharat Dogra

Gov't Leaves Farmers to the Mercy of Moneylenders By Bharat Dogra

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 middle-level farmers."

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 calculations.

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 this."

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