The Hindu Business Line : Educating farmers

The editorial “Not by loans alone” (Business Line, August 15), rightly pointed out that credit is only one of the inputs required for agriculture, and more important is to build capacity among farmers to utilise credit e ffectively and to repay the loans on time and with ease. More often than not, farmers borrow money for agricultural purposes but use the funds for other purposes, such as daughter’s wedding, their medical treatment, etc. They do not use credit productively.

There have also been very few efforts to educate farmers in the matter of utilisation of bank credit in a profitable manner. Credit literacy is totally absent. The ongoing campaign for financial inclusion has also become another ritual. Here, the stress is only on opening accounts and not on cultivating the saving habit and using loans profitably. To correct this, financial inclusion must be widened to educate farmers on how to use credit effectively. Farm growth has stagnated at a meagre 2.2 per cent for several reasons. Use of credit taken for farm expansion for consumption, de-motivation of farmers on account of unremunerative prices for farm products, poor farm management, poor risk management, absence of proper planning, including financial planning on the part of farmers, etc., are the reasons. In the 1960s and early 1970s, farm extension activities were given a lot of importance. Extension officers and field visited farmers regularly, and gave them invaluable advice. Today this activity is totally absent.

De-risking farming activity too must be an area of focus in the days to come. A strong loan repayment culture must be developed among farmers.

K.K. Ammannaya Udupi