BARGARH:It’s private credit rather than institutional finance to blame for the spate of farmer suicides across the State. While the benefits of bank credits are availed by land owners, the sharecroppers fall back on private lenders who provide loans at the doorsteps without the hassles of paperwork but charge a high rate of interest. This turns fatal for the landless or marginal farmers in case of crop loss.
At a time when Kisaan Credit Card (KCC) scheme, launched in 1998, offers easy loan and flexible repayment option which even tenants and sharecroppers can avail, suicide by farmers under debt burden has become a baffling trend. But there is more to it than meets the eye.
A senior bank official revealed that 90 per cent of agriculture loans disbursed under Kisaan Credit Card (KCC) scheme has been placed under non-performing asset (NPA). He further said the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 has excluded agricultural land. Hence, it ensures that banks cannot keep, seize or auction agricultural land in case of default in agricultural loan.
According to sources, the land owners avail the bank loans but are not interested in paying it back. With political parties choosing farm loan waiver for electoral gains, these land owners wait for this benefit to be announced. Moreover, there are middlemen who know the trick to facilitate agriculture loans from banks and they do it on a 50:50 sharing basis. The land owners do not mind sharing the loan as they do not have to repay it or lose their land.
More than the original land owners, who are distancing themselves from agricultural activities due to lack of adequate workforce, courtesy the State Government’s `1 per kg rice scheme, the sharecroppers are into cultivation. With the proposed Land Tenancy Act hanging fire, the sharecroppers, mostly landless, small or marginal farmers, get into verbal agreement with the land owner and have to pay seven to 12 bags of paddy each weighing 75 kg. At times, they take the pain to dispose of the paddy in Market Yard and pay the land owner in cash as per the prevailing minimum support price. However, the truth is that there is no written agreement between land owners and sharecroppers, which deprives the latter of the benefits being rolled out under KCC.
Hence, the sharecroppers are forced to depend on non-institutionalised credit as they hardly have enough liquid cash to purchase seeds, fertilisers, pesticides and harvest the crop. With no other income source other than agriculture, crop loss leaves the sharecroppers devastated as they cannot escape from repaying loans to private lenders or settling the dues of the land owner.
Sources in the banking industry said just like `1 per kg rice scheme which has hit the rural economy, farm loan waivers are affecting agriculture and the banks. Several States like Maharashtra, Uttar Pradesh and Andhra Pradesh have written off loans of the farmers in the past. With voters aware that the general elections are slated in 2019, farmers in Odisha are hopeful of yet another round of waiver.