Sambalpur: In 2009, 43 farmers in Orissa committed suicide. It was a year that saw a massive farm loan waiver by the UPA government and also a record investment of over Rs 1400 crore in farm credit by the state government. But they were all small farmers who couldn't access institutional loan and had to borrow from microfinance NGOs at an exorbitant rate of interest. Many, even the state government, suspect it's this exploitative loan network that may have driven loan farmers to commit suicide.
A farmer in Sambalpur, didn't get water for his fields, subsidies, or insurance cover. What he got readily was a loan from a local microfinance NGO, at an incredibly high 24 per cent interest. The fear that he would never be able to pay back, drove him to suicide.
As more and more farmers commit suicide in Orissa, crushed under debt, loans have become a scare.
"I fear taking loans. I've never taken it nor will I ever," said Shankar Dhurua, a farmer from Kusumdihi in Sambalpur.
In rural Orissa today, Microfinance NGOs operate through Self Help Groups and local fertiliser and pesticide dealers - people who are most likely to know which farmer needs a loan.
Banks give loans at 5 per cent interest, but unable to provide documents, small farmers end up going to these NGOs where loan disbursal is quick, but the interest charged could be anywhere between 24 per cent and 50 per cent.
"Ninety per cent small farmers fall prey to well-organised loan campaigns by multiple players, without assessing whether it will benefit them or land them in trouble,'' says Durga Bag, a farmer.
A farmer who takes this loan is trapped in a life-long cycle of debt - a burden that has started driving them to suicide.
''The exploitation is visible in cases where farmers had received microfinance from NGOs, and they are exploiting the farmers,'' said Dr Damodar Rout, Orissa Agriculture Minister.