BANE, NOT BOON

The Kisaan Credit Card which was supposed to benefit small and marginal farmers in Uttar Pradesh is proving to be their undoing. India Today's Subhash Mishra explains why.

The Kisaan Credit Card (KCC) was meant to bring great relief to the farmers. But it is priving to be a bane, not a boon. The supposed beneficiaries, the small and marginal farmers who constitute 80 per cent of the total farming community in Uttar Pradesh, are now being pushed to the wall as a good crop has eluded the arid state and they cannot repay their loans.

It all started about a decade back, when national banks, at the behest of the Government of India had launched the KCC scheme to advance credit to the needy farmers for purchasing agricultural inputs. The farmers were to re-pay the loans after harvesting by selling their produce. Though the policy sounded good on paper, in practice, it is only bringing agony to the farmers.

Owing to drought-like conditions, the escalating cost of inputs like fertilisers and irrigation facilities and low returns on produce, the credit card holders are not able to repay their loans. And the
penalty: they are being deprived of their precious land. With the passage of every season, the KCC scheme is reducing the farmers into landless liabilities and their number is swelling at an alarming rate.

"I had taken a credit of Rs 46,000 from a local bank on the KCC. But due to the drought-like conditions in the last season, the entire paddy crop wilted and the production of wheat in the next season was not up to our expectations. As a result, I am not able to repay the loan now," laments Munnu Lal , the former pradhan of Sarwan village in Unnao district hardly 50 km from the state capital.

Parts of Unnao faced drought in 2005 and the successive drought has shattered the livelihood of the majority of the farmers. When the state Government declared drought in parts of the state, the farmers were hoping that it would intervene and help the farmers. But all that the Government did was to issue relief cheques worth Rs 30 to Rs 300.

In 2006, the weather conditions were same but the Mulayam Singh Yadav government deliberately abstained from announcing drought which again hit the farmers. "We had no other options but to take crop credit loan from the banks and now we are helpless in returning the loans," said Surendra Tewari of Sarwan village of Unnao.

The agricultural land of thousands of farmers who inherited it from their ancestors are mortgaged with the banks and if they don't pay back the loans, they would be loosing their land forever.

In order to extract loans from defaulters, the banks are issuing notices and recovery certificates and the recovery agents of the administrations and the banks have driven the defaulting farmers out of their native places.

"I run away from my house when I get information about recovery agents reaching here," regretted Jaan Mohammed of Jurawarganj village. "You should not be surprised if people of this region start ending their lives after a year or so," explained former pradhan Munnu Lal, who said in the absence of rains, the cost of production escalates alarmingly while the returns are very low with low yield. So how will the small and marginal farmers repay the loans, he asks.

Till a few years back, the average rain all of the state had been
947.4 mm while in the year 2006-2007, it was just 554.6 mm, according to figures from the Agricultural Directorate. This means the average rainfall is nearing half as compared to the yesteryears which is bound to affect growers, mainly the resource-less small and marginal farmers, who are dependent on the rains.

Unfazed by the situation, the nationalised and regional rural banks are busy organising loan melas and KCC camps in different parts of the state to achieve their targets. The banks have been asked by the central Government to disburse loans to the tune of crores of rupees every year through the KCC and it is not thewir problem if the farmers cannopt repay he loans. The mortgage of the agricultural land of defaulting farmers takes care of their loans. The land is auctioned at an appropriate time to recover the dues. It is the farmer who stands as a biggest loser in this game.

The plight of the farmers does not end here. Of late, the banks have been directed by the Government of India to sell the maximum number of tractors to farmers ,apparently to enhance the sale of the tractor manufacturing companies. Like other nationalised banks, the SBI has this year set a target of selling 5,000 tractors in the current financial year. A section of bank officials are accused of being hand in glove with the local dalals and it is alleged that they lure the farmers to buy tractors on loans after paying off an initial amount.

When the farmers is not able to repay the loan for obvious reasons, the banks confiscate the tractor and mortgage his land. Bundelkhand, which is the most backward region of the state, is recording a sale of 1,500 tractors every year and most of the buyers are defaulters, some to the extent of turning landless while re-paying their loans.

"The farmers in Bundelkhand are falling prey to the business tactics of banks and the private companies. Despite knowing the drought-like conditions prevailing in this region, and production and productivity falling every season, banks and the brokers are luring them into a trap they cannot get out of.

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