HYDERABAD: Every successive government has implemented scheme after scheme “to save” the debt-ridden farmer, yet none of them seem to have made any impact. A new worrisome report released by the government-owned NABARD claims that 79 per cent of Telangana farmers are struggling to repay their loans on time, based on a survey conducted in 958 households of the State, spread across 48 villages in six districts. No wonder then that the State ranks high on farmer suicides.
The debt per household in Telangana ranges between Rs 80,000-Rs1,20,000, with an average outstanding debt of Rs 91,407. While debt by itself is a problem of economic insecurity for these farmers, the source of debt will decide the intensity. For instance, debts pending with private lenders and loan sharks carry far more threats compared to ones taken from banks or micro-finance institutions.
In Telangana, according to the survey, 40 per cent of the loans taken by farmers are from non-institutional sources -- that is, loan sharks and private lenders, or at times from friends and family. Also, the loans are not incurred on farm input like manure or fertilisers but mostly on personal needs like health expenses and domestic needs.
Experts say the trend indicates that income generated from farming is insufficient to meet the needs of those engaged in the activity. While the governments have doled out various schemes, waived off loans several times, the inability to ensure value for the yield has stunted the economic growth of farmers. The growth in their income was drastically disproportionate to inflation.
This also has a lot to do with the borrowing patterns of the States, says the report. In Telangana, rate of borrowing money from lenders is comparatively higher. For instance, 74 per cent farmers in Telangana opt for loans while the corresponding number for Andhra Pradesh is 76 per cent. However, the national average is just 40 per cent.
62 per cent farm families in the State saved up a small amount for emergencies and the average of the amount stood at Rs15,595 a year, marginally higher in Andhra Pradesh at Rs17,742.
Agricultural households need greater help
Taking all households together, 47.4 per cent of the households were found to be having some outstanding debt as on date of survey. The incidence was higher among agricultural households (52.5 per cent) as compared to non-agricultural households (42.8 per cent), pointing towards a higher need of financial assistance among agricultural households.
Southern states top the list of farmer indebtedness
The All India Financial Inclusion Survey 2016-2017 shows Telangana stands highest in indebtedness of farmers with over 40% of them from non-institutional resources. Neighbouring Andhra Pradesh has 76 per cent of its farmers struggling to repay loans while Karnataka has 75 per cent.
Use of Kissan credit card low at 10 per cent
Despite these troubles, the study found that utilisation of Kissan credit card (KCC) among the households surveyed was very low at 10.5 pr cent. It also found that many farm households were not cultivating crops in a commercial manner. On the other hand, the savings pattern in these households, for emergencies, was on par with national average. On classifying by number of loans taken, more than 80 per cent households have taken only one loan in the said period. 13 per cent reported 2 loans and in about 3 per cent number of loans went up from 3-5 loans per family.