In the early hours of a foggy morning in the sugarcane belt of western Uttar Pradesh, produce-laden bullock carts move about in Rasoolpur village, Hapur district, about 50 km from Delhi. As good a spot as any to gauge the impact of the ambitious loan waiver scheme for farmers announced by the UPA-I in 2008.
At a tea shop pit-stop en route, a group of farmers huddled around a fire provided early intimation of the state of affairs, “In most of the villages, almost 90 per cent of the marginal and small farmers have taken loans, but all are paying back with interest and overdue charges.”
Ram Charan Singh, a 70-year-old farmer from Rasoolpur, worries about his mounting debts. The announcement of the loan waiver scheme had brought a ray of hope, Ram Charan says, but the government and the banks have cheated farmers like him. In 2006, he had taken out a Rs 75,000 loan from Punjab National Bank to buy farming equipment and materials. Unfortunately, he did not get a good sugarcane yield on his four-acre landholding—or receive remunerative rates from the sugar mill. The burden was compounded by his being laid-up with an asthma condition, and marriages in the family. But without giving him a reason, the bank denied him relief. Finally, Ram Charan was forced to borrow money from relatives to repay the bank loan, which had risen to Rs 1.5 lakh, two times the initial amount.
There are several similar tales of woe in the village. Too many to recount in this space. So who exactly benefited from the loan waiver and debt relief schemes, the farmers ask the government. Around 80 per cent of the small and marginal farmers in the village have debts, says Karamveer Singh, the 40-year-old unmarried village head. He has faced harassment from the banks as well. In 2009, he paid back Rs 1.70 lakh against the Rs 1 lakh loan he had taken in 2006. “These politicians are responsible for the poor becoming Naxalites,” he says. “They don’t detail the tax relaxations given to the corporates, but send goons to harass the poor to repay debts.”
A visit to the Syndicate Bank branch located on the Kuchesar bypass road is an eye-opener. Reportedly, this branch has disbursed the maximum number of loans in the area. The bank staff is evasive, refusing to share details of the loan waivers. The manager is nowhere in sight. And the loan records? We’re told they are kept at the regional officer’s residence.
By Panini Anand in Hapur
The fact that the poor got subsidies, and the rich get incentives, is working to a point, in alleviating poverty. It appears, poverty is declining to a perceptible degree. But it does appear, the poor were so without hope as farmers, that they had to become software professionals, and occupy other jobs. I am not against social prosperity. I mean, give Dalits good professional opportunity, if need be, and the whole community. But don't tell the farmer that his land is only good, to build malls and high-rises, and not for farming. The govt. is harming society, it might be perceived. People with land, sell it and become professionals in regarded fields, because they are insecure, about how others might use money when they become doctors and engineers, and especially when they acquire agricultural land to build construction.
Why do you need to sweat and farm if you know that the govt will waive any loans you have taken ? Dont tell me the poor farmers are stupid.
It is a moral hazard problem.
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