Wednesday, May 30, 2007


Publication: Times Of India Nagpur;
Date: May 31, 2007;
Section: Times Nagpur;
Page: 2
Will ‘defaulting’ farmers get fresh loans?
There is a fear that around five lakh farmers of Vidarbha will not be able to get institutional finance and will be left on the mercy of private moneylenders
Ramu Bhagwat TNN Nagpur

For farmers in Vidarbha, where most agriculture is still rainfed, monsoon is a time to look forward to. But even as preparations for the kharif crop have begun, a new worry has gripped nearly 75% of farmers who have yet to repay crop loans they took last year: Will they get new credit this year? This, when suicides remain unabated in six distressed districts of the region.

Apprehending that denial of farm loans by banks and credit societies may push farmers, who have defaulted on loans, further to the brink, Vidarbha Jan Andolan Samiti (VJAS) has already given a call for a ‘Hallabol agitation’ against banks from June 18.

“At the high-level National Development Council meeting, though the prime minister expressed concern over distress prevailing on the farm front in Vidarbha, the Centre or the state has not come out with any plans to increase farm credit in the region or helping out those farmers rendered ineligible for fresh credit,’’ pointed out VJAS convenor Kishore Tiwari.

There is a fear that around five lakh farmers will not be able to get institutional finance and will be left on the mercy of private moneylenders who charge usurious rates from the helpless farmers. After the prime minister visited the crisis-hit Vidarbha last year and announced relief of interest waiver, restructuring of loans and a year’s moratorium on repayment by National Bank for Agriculture and Rural Development (NABARD) infused a big rise in credit inflow from Rs 750 crore in 2005-06 to Rs 2,000 crore in 2006-07. A large number of farmers availed of institutional credit in the last crop season, adding to their pile of earlier unpaid dues.
Now, most of them are unable to repay loans because of poor returns from cotton growing. These farmers will find it difficult to get funds for fresh crop. What has worried even farm experts is that despite being unremunerative, farmers are continuing their preference for cotton as cash crop even in the coming season. In fact, there is a mad rush for Rashi-II brand of Bt cotton in the countryside and the seed is in short supply. “Clearly, the situation is getting worse. There is hardly any increase in procurement price of cotton. How will the farmers repay after meeting the rising input costs?’’ they asked. The government has admitted that Bt cotton is not suitable for cultivation in rain-fed areas of Vidarbha but, unmindful of the consequences, farmers are being carried away by promises of a bumper crop from Bt seeds. Bt seeds manufacturers are aggressively selling their brands.
While Amravati divisional commissioner Sudhir Goel, who also heads special mission implementing farmers’ relief packages, was not available for comment, banking sources said the fund flow would be increased to Rs 2,860 crore this year. But they were not sure if majority of farmers would be able to get it as they have yet to repay the old dues.
The distressed farmers here, who until now ended their lives due to their inability to repay debt, will now wonder whether they will get it in the first place.

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