Sampla, Haryana: Farmers in the rest of the country may be rejoicing, sad or angry, depending on whether or not they have qualified for the debt waiver. But in this Haryana village, about 55km from Delhi, the mood is largely one of indifference.
It’s not that farmers in Sampla, a village of 30,000 people, are unaware of the bonanza being doled out by the government or have lost interest in money. It’s just that the “small and marginal” farmers here are virtually all rupee millionaires, thanks to land prices in the region that have soared.
“Whatever they are getting is a bonus for them. They really don’t care much,” said S.N. Ahuja, senior manager who heads Punjab National Bank (PNB)’s Sampla rural branch.
S.N. Ahuja, senior manager at PNB’s rural branch in Sampla, helps farmers understand the loan waiver scheme (Photo by: Harikrishna Katragadda / Mint)
According to the government’s definition, those holding 5 acres or less are small and marginal farmers and are eligible for a total waiver of the debt they have defaulted on until 31 December 2007 and that remained unpaid till 29 February. About 43 million farmers all over the country are benefiting from the Rs71,680 crore debt waiver.
Because of its proximity to the Capital, the price of land in this village has surged five-fold in two years. According to conservative estimates, one acre of land in Sampla costs Rs25 lakh. And going by the government’s definition, a small farmer holding 5 acres of land is worth Rs1.25 crore.
“I thought there would be a bloodbath... I thought the deprived farmers would gherao our branch. I have already spoken to the deputy superintendent of police for protection,” said R.K. Sharma, manager of Allahabad Bank’s Jhajjar branch, about 2km from the Sampla branch.
But two days after the bank put up a list of those eligible for the loan, “not even a single fly has come to check it,” he said.
Sampla is about 15km from Rohtak, hometown of Haryana chief minister Bhupinder Singh Hooda, where one acre costs more than Rs1 crore, thanks to the land price boom.
Not that people here don’t need the waiver. About 238 people owe a collective Rs1.75 crore that will be waived.
“Make no mistake. People here have assets, but they don’t have cash,” said a PNB official who didn’t want to be named. “They need fresh loans to harvest. Unless the loans are repaid or are waived, they are not eligible for fresh crop loans,” added the official.
“But by and large, people here are waiting for their lands to appreciate more, so that they can just sell it, become millionaires, and move to some other place; this is called the Sonepat effect,” he said.
In Sonepat district, bordering Delhi, big-ticket property developers such as DLF Ltd, Taneja Developers and Infrastructure Ltd and Ansal Properties and Infrastructure Ltd are developing sprawling townships.
“At the start of this property boom, developers were paying Rs40 lakh for an acre of land, but now they are paying anything the farmers want,” said N.S. Sheoran, lead district manager for Punjab National Bank in Sonepat. “Money is not at all a constraint anymore. One acre of land is now selling for Rs2 crore and it will only go up if there is any land left.”
Developers are also reaping huge profits. One acre of land is less than 5,000 sq. yards. According to bank officials, developers are selling a 250-sq. yard developed plot for about Rs50 lakh. Mint could not independently verify this.
Back in Sampla, where the literacy rate is about 70%, officials say agriculture is not the mainstay of farmers now, most of whom have become land dealers. “Dealing in land is a big business here,” said a bank official Sampla. “Through farming, they earn about Rs15,000 per acre per year. By acting as a middleman, they easily pocket Rs2-3 lakh.”
The Sampla farmers who defaulted on their loans had been hit by drought that damaged their crops—wheat, rice, sugarcane and pulses.
“Last year when I harvested wheat, the rain didn’t come. This year when I harvested onions, there were heavy rains,” said Hari Om, a farmer in Ismailah village who owns 4 acres and had taken a loan of Rs2 lakh on Kisan credit card. His loan has been waived.
Ram Niwas of Bhansaru Kalan village also failed to pay the Rs1 lakh loan he had taken on his Kisan credit card. He had a yearly instalment of Rs90,000, of which he paid Rs70,000. His debt of Rs1.2 lakh was waived and now he can apply for fresh loans.
“If I had the means, I would have paid the full amount. But I am extremely grateful to the government that they waived my loan,” said Ram Niwas.
But not all are so happy.
Raj Karan of Bahadurgarh village, for example. He had taken a loan of Rs4 lakh to buy a tractor and though he defaulted on part of it, he got a waiver of only Rs14,000. “This is not fair. When other people are getting a waiver of Rs2 lakh, I am getting a waiver of only this much,” he said.
His problem is that he holds a little more than 5 acres of land, so the waiver he is getting amounts to only 25% of his default. And that only if he promises to pay the remaining 75% of his dues in three instalments in the next one year. Raj Karan had been expecting a waiver of Rs1.2 lakh, though he was not sure on what basis. “If others get a Rs2 lakh waiver, why can’t I get Rs1.2 lakh,” he asked.