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After three successive drought years, farmers were expecting a good rabi season as many States received good rainfall. But their hopes may be dashed due to the challenges thrown up by demonetisation
With bank staff across the country busy with the demonetisation process, farmers, particularly the small and marginal, are worried about getting timely credit.
“If you don’t complete sowing by the month-end, you are going to have lesser yields. Going by the slow pace of work at banks, it is unlikely that farmers will get timely credit,” Sarampally Reddy, National Vice-President President of All-India Kisan Sabha, said.
Since the demonetisation process overlaps the kharif harvest and rabi sowing season, farmers are at a loss as to how to get over this challenge.
In the absence of credit flows from public financial institutions, farmers will have to depend on private lenders, who charge up to 40 per cent interest.
A senior official of Andhra Bank and State Level Bankers’ Committee (SLBC) admits to the problem. “The preoccupation of bank staff with currency-related work post-demonetisation has hurt the rabi loan disbursal. Though some branches in Andhra Pradesh have completed documentation for those farmers who paid previous crop loans, disbursal could not be done as there is severe shortage of cash,” he said.
The problems in rabi loan disbursal was also taken up in the in SLBC meeting of AP held last week. The State government has summoned SLBC member-banks again this week for yet another round of talks to ensure credit flow. The situation is no different in other States.
“When we have been burdened with the mammoth task of demonetisation, other transactions will naturally get hit,” the official said.
Reddy cites the example of Telangana. “The plan was to disburse loans of ₹11,300 crore but not a single rupee was released yet. In the kharif season too, they announced a credit plan of ₹29,101 crore but disbursed only ₹6,000 crore. They are simply refusing to entertain queries on rabi loans,” he said.
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