A welcome move

The State Government’s decision to pay interest on loans given to farmers directly to banks from this kharif season is a welcome step to lessen the financial burden on them. It will be done only when the beneficiaries pay the principal amount to the respective banks within a year. 

The practice so far is the government reimburses interest after the farmers pay the principal and interest. Another measure that was announced by the government in tandem at the 178th meeting of State-Level Bankers’ Committee (SLBC) meeting in Hyderabad on Tuesday by Chief Minister N. Kiran Kumar Reddy was bankers were told not to adjust the input subsidy amount towards farmers’ loans. These twin initiatives are expected to ease the bank loan load particularly on poor and marginal farmers in remote areas of the State. Coupled with an increase in lending by SLBC to the agricultural sector by Rs4, 972 crores to Rs52, 972 crores, for the 2012-13 fiscal, the farmers should be able to reap some benefits from the next crop season. However, the success of these steps depends on two key factors: One, farmers’ awareness about the schemes and banks’ presence in remote areas, particularly in the backward districts of Telangana. If the farmers are ignorant of easy finance and if there is no bank within their reach, the very purpose of such initiatives would be defeated. So, it’s necessary to ensure that the beneficiaries are well informed and bank branches are set up in remote areas. Lack of rural banking services forces poor farmers to borrow from local moneylenders at exorbitant interest rates which turn them into paupers if they default or drive them to commit suicides. 

Farm loans are only part of the agricultural strategy in agrarian States like Andhra Pradesh where the coastal Andhra is rice bowl and Telangana and Rayalaseema are chronically water deficient. They also suffer from inadequate inputs and other shortages that often lead indebted farmers’ to end their lives. The imbalances within the State -- problems of plenty and shortages -- can be corrected to some extent by addressing the farmers’ problems in totality. For instance, last year farmers in some coastal districts declared a crop holiday because the support price the government fixed was very low. Similarly, cash crops growers in other districts resorted to agitations over lack of competitive support price, shortage of seeds and fertilizer, irregular power supply to agricultural pump sets, not enough space for storage of grains and other commodities in agricultural marketing yards, etc. While government officials insist that these are seasonal problems, the issues are vitally important to farmers as well as for the healthy growth of agriculture in the State. 

While the financial component of the farming sector has been made a tad easy, it’s incumbent upon the government to look into the other problems dogging the community. With the onset of the monsoon, sowing operations have begun and farmers are complaining about short supply of seeds and fertilizer. If these inputs do not reach the farm holders on time they suffer heavy crop losses. That means the bank loans they avail of go down the drain. Not only it’s a financial loss to the grower but also production loss to the State. Such losses can be obviated by dovetailing farm loans with subsidies, inputs, supply-demand mechanism and prices.

Courtesy : The Hans India