Yavatmal: The Vidarbha region in Maharashtra has been in the news for a few years because of a spate of farmer suicides. To understand the impact of the government’s populist farm loan waiver scheme in this region, Mint has partnered with Dilasa, a non-governmental organization that works in rural Maharashtra. Dilasa’s volunteers will, in the run-up to the deadline of 30 June, visit farmers, banks and local administrators in Vidarbha’s Yavatmal district and file daily reports on the waiver scheme.
The ambitious farm loan waiver package was intended to benefit small farmers the most and stem the wave of suicides by farmers reeling under crippling debts. But Vidarbha — the region that has seen the maximum suicides — will not be a big beneficiary of the scheme.
Vidarbha is largely a poorly irrigated, dry land mass. Since productivity is low here, farmers usually own large plots of land, and this is what has now become a bane for them.
Farmers here mostly have landholdings exceeding 2ha, or five acres, which means they are not identified as small farmers under the scheme and, therefore, not eligible for a full debt waiver.
Under the scheme, farmers holding more than 2ha of land are only eligible for a one-time waiver of Rs2,000, or 25% of their outstanding loans, whichever is higher. And this benefit, too, will be available only to those farmers who give an undertaking that they will pay up 75% of their loans by June 2009. Most farmers in Vidarbha are in no position to do this.
“The scheme should cover all farmers,” said Kewalsingh Dharamsingh Kapur, a farmer in Pandharkawada in Yavatmal. “The land ceiling should be raised from five acres to at least eight acres to include more farmers,” he added.
Sowing in Vidarbha is done between 6 and 15 June as that is the time when monsoon usually hits this area. Most farmers seek loans in the month of May to pay for seeds.
Under the waiver scheme, banks have time until 30 June to identify the beneficiaries. A list of names will then be put up and the beneficiaries will be required to seek a certificate of waiver. Following the waiver, these farmers will become eligible for fresh loans. The loans will be disbursed between 8 and 15 July.
Since sowing cannot be pushed back until mid-July, most farmers have already taken loans from private moneylenders in anticipation.
The package covers loans overdue on 31 December 2007 and remaining unpaid until 29 February. Old debtors will see their names stuck off the bank books. A large number of farmers who were repaying their debts on time did not pay their instalments this year hoping that they too would be covered under the waiver scheme.
“Our bank had some 7,193 farmers who were prompt in repaying their loans. But this year their number has shrunk to just 399,” said P.S. Sontakke, manager, Yavatmal District Central Co-operative Bank Ltd.
Vasantrao Gulabrao Thakre, a farmer in Yavatmal, said that he used to be prompt in paying loan instalments. He stopped paying them this year, hoping to be named a beneficiary. “The scheme has penalized borrowers with a good payment record,” he said.
“I repaid my loan this time. But I will not repay in future,” said Madan Suryabhan Jiddewar, a farmer in Pandharkawada. “The waiver scheme is all messed up. It has brought no relief to suicide-affected Yavatmal. The honest farmers have been penalized.”