This Article is From Mar 07, 2014

Farmers in Vidarbha pushed into debt traps

Wardha, Maharashtra: The cotton crop is ready on Jyoti Timande's two acre field, but she doesn't have too much hope of a decent remuneration.

Not far away, Subhash Halge supervises the cotton plucking on his 13 acre farm, though the size of his field doesn't improve his chances of earning a better income.

Big or small, cotton cultivators are still reeling under debt and though the support price for cotton is at Rs 4000 per quintal, farmers say it will barely cover their operating costs. Worse, many have been pushed out of the banking system, forced to turn to private money lenders when banks fail to provide adequate credit.

Ms Timande says, "Banks say we have to clear old dues before getting new credit. But the yield earns us next to nothing. That pushes us towards others (money lenders) to get credit. Their interest rates are exorbitant but there is really no other option left before us. I've pawned my jewellery with the bank, but no new loans are coming our way even if we offer to pawn more jewellery. "

What was once called white gold - cotton today means a repetitive cycle of debt and though loan waivers have provided marginal relief in the past, it hasn't tackled the problem of farmer distress. Activists say the PM's relief package of 2006 benefitted farmers in western Maharashtra more than those in Vidarbha, which had seen an alarming rise in farmer suicides. 50 per cent of the loan waiver benefited western Maharashtra, Marathwada region got 22 per cent, while Vidarbha, where the crisis was most severe, only got 18 per cent of the benefit.

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Farm activist Vijay Jawandhia explains, "Suicides are just the tip of the iceberg. The truth is the whole agricultural system is in crisis." He says "The support price for agricultural produce hasn't kept pace with the times and input costs are constantly rising. Maharashtra has an interest free loan scheme for upto Rs 1 lakh, but farmers are not being able to utilise this. It's no longer viable to be a mere farmer."

85 per cent of the fields in Vidarbha are non-irrigated. "On an average, a farmer produces an average of three quintals (cotton) per acre and earns around Rs 15000 for it. But his input costs are anywhere between Rs 10000-150000 per acre. So what is he really earning? And that's not counting his labour costs, health, education costs, etc," says Mr Jawandhia.

Some farmers like Subhash Halge have already learnt their lesson and encouraged their children not to be dependent on their fields for their livelihood. "None of my sons has any interest in farming. One has started something on his own, the other is working with a company," he says.

He also says he's not alone. Like his sons, many in his neighbourhood are also considering moving away from the traditional livelihood of farming to other options that are less risk intensive and ensure returns on investment.
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