M A I N   N E W S

Crackdown on loan defaulters
Arrest warrants against 1,500 farmers; 6 held
Jangveer Singh
Tribune News Service

Chandigarh, May 3
The crackdown on farmers defaulting on agriculture development bank loans in the cotton belt in Punjab has begun with the first set of six farmers being arrested from Deputy Chief Minister Sukhbir Singh Badal’s constituency of Jalalabad in Ferozepur district today.

The Primary Agriculture Development Bank (PADB) has issued 1,500 arrest warrants, which will be served in the coming days in an attempt to increase the rate of recovery in the Ferozepur and Faridkot divisions of the bank covering Ferozepur, Faridkot, Moga, Bathinda, Mansa and Muktsar districts. As many as 400 warrants have been issued in Mansa district followed by 200 in Bathinda district.

The PADB is not stopping at this. It has prepared cases of auction of land of 2,500 farmers in the cotton belt and also fixed sale dates for 250 cases this month itself. Farmers have pledged between one to five acres of land to avail themselves of loans from the bank.

The bank is witnessing a default of around 60 per cent in the cotton belt. The amount due to be recovered from around 20,000 defaulting farmers is Rs 325 crore. The bank has recovered only Rs 1.35 crore since the recovery process began on April 15. It has a target of recovering around Rs 125 crore in the next one month or so.

State Cooperative Agriculture Development bank General Manager Gurmeet Singh Brar said the worst scenario was in Mansa, where the recoveries were only 15 or 16 per cent. The bank has stopped giving further loans in Mansa district. Brar said the reasons for the poor recovery included a concerted campaign initiated by radical farmer organisations, which were encouraging farmers not to pay their loans and promising a general waiver to them.

The General Manager said the cotton belt also had a history of poor recoveries due to successive crop failures. Besides this, he said the central loan waiver scheme had also affected recoveries with farmers stopping payments in the hope of being included in the scheme. Muktsar has a recovery rate of 30 per cent, while Bathinda has a recovery rate of 40 per cent.

The Punjab farmer had a much better track record earlier as far as agriculture loans were concerned. Ten years ago, the recovery rate was 90 per cent. In 2004-05 the recovery rate of Jalandhar division was 73 per cent, Patiala division 63 per cent and Ferozepur and Faridkot divisions 32 per cent.

At present, the recovery rate of Jalandhar and Patiala divisons has gone down to 44 and 48 per cent, while that of Ferozepur and Faridkot divisions is 40 per cent.

The PADB has to recover around Rs 2,500 crore from around 70,000 defaulting farmers in the state. Though it has increased its recovery targets, particularly those for the cotton belt, sources said a decrease in wheat yields this season could affect the recovery drive.

10 yrs ago, recovery was 90 pc

The recovery rate among Punjab farmers was 90 per cent 10 years back. Successive failure of the cotton crop, use of loans for purposes other than agriculture and hope of further loan waivers has resulted in a steady increase of defaulters, who are up by around 40 per cent now.