“It rewards defaulters”

Farmers who have paid off their loans are feeling cheated, writes Shveta Pathak from Ludhiana

Farmers Harvinder Singh, Mohan Singh, Hari Singh, Satvinder Singh, Dhanna Singh, Jagir Singh and Baljinder Singh of Jodhan village, Ludhiana, discuss the loan waiver. Photo: Inderjit Verma

Cycling to his farm 55-year-old Nachhattar Singh smiles to himself thinking of his lush green fields where wheat gets ready to be harvested next month. A small farmer, with a five-acre land holding in village Jandiali Khurd in Mandi Ahmedgarh, he feels content. With an income which in no way is substantial, he has managed to run his household, never letting anyone doubt his credibility. He paid off his loans regularly, though not comfortably. He is joyous at the news of the loan waiver.

The glow fades away the moment he learns the limits of the waiver. "Why a waiver only for those who defaulted? What about people like me, who have been prompt with payments despite difficulties?" he gets bitter.

Relying most of the times on an the arhtiya, who charges at times even more than 24 per cent interest, Harvinder Singh of village Sarabha in Ludhiana, is troubled that the waiver is not for people like him. "We heard a lot of robust economic growth. We cannot afford even essential commodities. To pay off my loans, I mostly rely on the arhtiya as banks have tedious procedures. Farmers used to be a priority for the government but I am unhappy as they have only thought of a small section of farmers."

Data may project a steep rise in institutional credit, more than Rs 20,000 crore in case of Punjab, but people like him prefer going to commission agents over banks thanks to easy access and trust factor. Even as experts cite a figure of 4 lakh farmers in the state who would benefit, farmers here, better aware than their counterparts in the state, are feeling left out.

" The poor man will not get much. The announcement sounds drastic, hence they made it. Visit the school in our village and you would know why most kids do not study here. We want our kids to be educated. We want cheaper commodities," says Bajinder Singh of village Jodhan. His friend Hari Singh corroborates his views. "To improve life for farmers a holistic approach is needed. One loan waiver may benefit a few but what happens after this?"

A native of village Sarabha in Ludhiana, Hoshiar Singh is worried about repayment of his loans. He also took a loan to get his daughter admitted into a nursing course. "I wanted my kids to be educated, but these days managing even daily expenses has become difficult. From fuel, pesticides, fertiliser, seeds to essential items used in households, prices are galloping. I learnt about the waiver but wont benefit as much of it is from the arhtiya. I would have been happier if the government had announced measures that made essential commodities, health and education affordable. Why should the government not consider all farmers, whose contribution to the country cannot be ignored?" Similar questions bother farmers of Ludhiana, Jalandhar, Patiala, Amritsar, Ropar, Pathankot and Hoshiarpur, areas which are home to the "relatively better-off" farmers. Of the estimated 10-15 per cent default cases in the entire state, the share of farmers in these places is meagre.

However farmers, most of whom live amid poor infrastructure in the rural areas, apart from inflated costs in the capital intensive agricutural sector, the rising cost of living, education, medical facilities have been adding to their woes.
Non-institutional credit, termed the biggest evil by experts, comes as a relief to them and that is what most farmers prefer.
"Go to a bank and they will make you stand in a queue for hours. Your wait for loan can extend even up to six months. The arhtiya, on the other hand, can be approached any time. We cannot rely on banks. We know that the interest that our arhtiya charges us is very high but then if we do not get a loan when we want it, which is what banks do, what is the use? If we go to the arhtiya it is only because we are unable to get loans as easily from banks. The government should have thought of this," contends Jasbir Singh of village Cheema Khurd in Amritsar.
In Punjab, where growth in agriculture was a dismal 1.7 per cent against a two per cent national average, the loan waiver announced for small and marginal farmers would benefit around four lakh to five lakh persons.

Experts point out that with an equal sum of money, if the government wanted to benefit all farmers, irrespective of the size of their land holdings, it would have waived interest for two years. Waiving arhrtiya loans, say experts, would lead to multiple problems and may not be viable. "The waiver would benefit some farmers which would help them revive. But we cannot ignore that the nine per cent economic growth failed to benefit the farming community. Punjab, in particular, had a dismal growth in agriculture. This necessitates an approach that benefits the entire community," opines Dr P.S. Rangi, consultant, Punjab State Farmers Commission. Regulating money lenders, a long-pending proposal, say agri-experts needs to be done on an urgent basis. They suggest special incentives for farmers. As Rangi says, "Input costs have increased manifold and so has inflation. For the farming community to derive benefits of economic growth, it is important that more measures be thought of." Arhtiyas do not even maintain proper records. Their dealings are dubious. In such situation whose loan would you waive off?"

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