Robertsganj, Uttar Pradesh : India’s grand farm loan waiver scheme was expected to spread cheer across the rural heartland. Instead, it is creating a gulf between the haves and the have-nots among the poor.
The government’s largest-ever bailout programme will benefit about five million farmers in Sonbhadra, one of Uttar Pradesh’s poorest district. But close to one-third of the population here doesn’t own any arable land and many say they are missing out on a free opportunity even as four years of drought has reduced food supply in the region.
No reason to smile: Mahesh Agaria (left), a daily wage earner, does not qualify for the scheme as he is landless. (Right) Farmers Bajrangi Maurya (L) and Shyam Buhari in front of the State Bank of India branch.
“We don’t get any benefits for farming, housing or anything else because we do not have land. It is very difficult for us,” says Mahesh Agaria, a daily wage earner who lives in Patgiri village, some 40km from here. He works as a daily wage worker, chipping stones at crushing units nearby; at other times, he travels miles to work in other people’s land for as low as Rs60 a day. Work under the government’s employment guarantee scheme is difficult to get despite repeated requests to village leaders, Agaria claims.
Around 80% of the population in Sonbhadra lives below the government-defined poverty line and some 30% do not own any arable land, according to Cashpor Micro Credit, which operates here.
While Agaria does not qualify for the latest write-off, the Rs71,680 crore farm loan waiver scheme will wipe out debts of millions of marginal farmers owning less than 2.5 acres and 25% overdue amount of those who have cultivable land more than five acres.
Bank officials say about 60-65% of bank debt, or Rs40 crore, will be cleared in this district alone when the scheme rolls out in less than a week. “Around 50,000 farmers will benefit,” says Tushar Kanti Bagchi, chief manager of Allahabad Bank in Robertsganj.
But some local observers also wonder whether such largesse is sending a wrong signal.
“There should have been an upper limit on how much one can forgive. Now richer farmers, who can afford to pay, will get a benefit of Rs5 lakh, which is kind of odd,” says one bank official at Robertsganj, who requested anonymity.
Meanwhile, the divisions here are apparent.
Bajrangi Maurya, resident of Nagnar Haraiya village, applied for a Rs3 lakh loan at State Bank of India (SBI) to purchase a tractor on 28 March. Recently, he visited the assistance counter — behind a row of stained cupboards in the main lobby — to find out whether the government has announced further extension of the waiver programme.
“If everyone else is getting the benefit, I have the right too, when costs of diesel and fertilizers are rising. We have to buy urea in the open market at Rs600 for a 50kg bag because the government godowns sell it in the open market. How will we grow food to eat?” asks the 22-year-old whose joint family of 20 grows rice and wheat together in a five-acre plot.
While the final list of beneficiaries is yet to be put out, Shyam Bihari points to his neighbour, Jwala Prasad, who managed to get a communication from the bank about his remaining loan being written off.
“He owns 40 acres of land and he is getting benefits. The scheme should be extended for all,” says Bihari, who had borrowed his second tranche of Rs80,000 from SBI in 2004, but can’t pay up because of a bad harvest.
Still, “while the waiver scheme is politically motivated, it will benefit farmers in pockets where crop insurance does not operate”, says N.R. Bhanumurthy, an associate professor at the Institute of Economic Growth.
The larger problem, say villagers, is the low productivity. In a good year, the district manages 20 quintal (2,000kg) of rice per ha, which is lower than the state’s average of 26 quintals, according to the state agriculture department. With scarce irrigation facilities and a prolonged dry spell, crop output has dropped by 25-30% in four years, says Rakesh Kumar Singh, the department’s deputy director.
A majority of the farmers say such one-time waiver is hardly a solution to their problem. “We need good irrigation facilities, better seeds,” says Bihari. “Everyone want our votes, but nobody is thinking of our real problems.”
Farm loans, says Rajesh Mishra, chief operating officer of Cashpor, is a distant issue for a majority of people who live on subsistence and, therefore, need loans every year for mere consumption.
Banks, on the other hand tend to service the well-off rural villagers than the poor, who turn to moneylenders that charge a high 10% interest a month, he says.
Local bank statistics show that 82 branches belonging to some 12 banks operate in the district.