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Rising farm costs cut into write-off gains

Rising farm costs cut into write-off gains
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First Published: Sun, Jun 29 2008. 11 51 PM IST

Bleak picture: Farmers busy packing potatoes near Shaktigarh in Burdwan district. A bumper crop this year has sent prices crashing, adding to the woes of farmers already burdened with rising input cos
Bleak picture: Farmers busy packing potatoes near Shaktigarh in Burdwan district. A bumper crop this year has sent prices crashing, adding to the woes of farmers already burdened with rising input cos
Updated: Sun, Jun 29 2008. 11 51 PM IST
Burdwan, West Bengal: With potato farmers in West Bengal grappling with falling prices and rising input costs, the farm loan waiver scheme has brought some succour. But inflation, particularly rising costs of farm inputs, is eating up the goodwill that the Congress-led United Progressive Alliance (UPA) could have scored with the Left-ruled state’s farmers.
Bleak picture: Farmers busy packing potatoes near Shaktigarh in Burdwan district. A bumper crop this year has sent prices crashing, adding to the woes of farmers already burdened with rising input costs.
West Bengal is the second largest producer of potatoes in India after Uttar Pradesh. According to the state government’s estimates, 320,000ha is under cultivation, yielding around 7.1 million tonne of potatoes a year. A bumper crop this year has sent prices crashing. “Whereas we sold at Rs110 per bag (each bag contains 50kg of potato) last year, this year we got as little as Rs55 a bag. It is not that we don’t want to repay the bank. They have always stood by us in our times of need, but we just haven’t been able to, this time. I am glad that my outstanding loan has been waived,” says Choudhury Abdus Shaban, a potato farmer from Puratangram village in West Bengal’s Burdwan district.
He had borrowed Rs50,000 from State Bank of India in 2006, which he now doesn’t have to repay , thanks to the government’s largesse. He is among the 2 million farmers in the state who are going to benefit from the scheme as banks write-off Rs1,500-2,000 crore in such farm loans. Burdwan district alone might account for about 10% of the total waiver in the state, say bankers.
“If we indeed get the loan waiver, I’d be able to pay the dowry for my daughter who got married earlier this year,” says a beaming Ganesh Naskar, another potato farmer from Gurpi village in neighbouring Hooghly district.
But some field officers of banks, whose principal job responsibility is to recover loans and educate farmers about the benefits of timely repayment, rue the government’s decision to waive unpaid loans.
“On 28 February, we held a recovery camp to tell people why they should repay loans on time. And the very next day, the finance minister announced delinquent borrowers would not have to repay their loans. Ever since, we have been facing a barrage of uncomfortable questions from honest borrowers, to which we have no answer,” said the branch manager of a nationalized bank in Burdwan town, who spoke on the condition that he wouldn’t be identified. He worries that the waiver would make loan recovery difficult for a long time to come. “Loan recovery in the whole state fell sharply after the waiver scheme was announced,” he said. “I don’t see the trend reversing very soon.”
Predictably, the scheme has created disaffection among a large section of farmers as well. “Is the government saying repaying loans is a bad thing?” asks Obaidul Mondal, another farmer in Burdwan, who like many others in his village, Bharicha, blames the UPA for not containing rising costs of farm inputs. “We are paying through our nose for seeds and fertilizers but, without doing anything to address that, the government is offering incentives to delinquents.”
And Shaban, despite being a beneficiary of loan waiver scheme, agrees. “Waiver or no waiver, I won’t vote for the Congress. We are worse off now than before because everything costs more,” says Shaban.
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First Published: Sun, Jun 29 2008. 11 51 PM IST