Agri Business

Inspired by Maharashtra’s farm loan waiver, Gujarat farmers demand a similar gesture

Rutam Vora Ahmedabad | Updated on December 23, 2019 Published on December 23, 2019

According to the SLBC report as on June 2019, Gujarat’s farmers had total outstanding of Rs ₹87,651 crore as agriculture loan consisting ₹49,339 crore as crop loan, and ₹38,312 crore of agriculture term loan used for farm equipment purchases

Saddled with a crop loan of ₹49,339 crore (outstanding as on June 2019), farmers in Gujarat have revived their demand for crop loan waiver.

The demand, formally raised by a Congress legislator from Patan district in North Gujarat, comes soon after the Uddhav Thackery-led government in neighbouring Maharashtra announced up to ₹2 lakh farm loan waiver for its farmers.

In a letter to Chief Minister Vijay Rupani on Monday, Kirit Patel, MLA from Patan, said farmers in Gujarat are passing through a tough time due to climatic adversities since last year. “There was deficient rain last year, and this year we had excess rainfall and unseasonal rains in some parts of the State. Also, North Gujarat is currently facing locus attack on a large area. The farmer has become helpless in the current scenario, where they don’t even get sufficient prices to their crop nor they get adequate compensation from crop insurance for their damages,” Patel said in the letter requesting the government to consider loan waiver for Gujarat farmers on the lines of other States, including Maharashtra.

SLBC report

According to the State Level Bankers’ Committee (SLBC) report as on June 2019, Gujarat’s farmers had total outstanding of ₹87,651 crore as agriculture loan consisting ₹49,339 crore as crop loan, and ₹38,312 crore of agriculture term loan used for farm equipment purchases.

The data also showed that the gross non-performing asset (GNPA) in crop loan segment stood at ₹2,054 crore, which is about 4.16 per cent of outstanding as on June 2019. This is higher than what was seen in the same quarter last year at 3.24 per cent.

Farmer leaders, however, believe that loan waiver alone may not entirely address the farmers’ woes. The Gujarat unit of Bhartiya Kisan Sangh (BKS) - an ideological affiliate to Rashtriya Swayamsevak Sangh (RSS) believes that the loan waiver will only help a select few farmers, while a large part of the needy farmers may not benefit from the move.

Vitthal Dudhatara, President of BKS-Gujarat unit said that loan waiver announcements in neighbouring States will only prompt farmers in Gujarat to demand it here too.

‘No uniform benefit’

“In the past, we have demanded farm loan waivers. But we have realised that it may not benefit all the farmers. We have observed that in tribal areas, even now farmers depend on private lenders due to lack of banking facilities there. These moneylenders charge exorbitantly high interest rates from them. The need is to provide a robust financial assistance to farmers,” Dudhatra told BusinessLine.

He termed the assistance announced by the Centre and the State governments in the backdrop of the excess rains and farm damages to be “peanuts” in comparison to what the farmers in other States get after the loan waivers.

“The neighbouring Rajasthan, Madhya Pradesh and now Maharashtra have announced farm loan waivers. But, farmers in Gujarat get financial support under PM Kisan Yojana, which is paltry in comparison with what farmers in other States get,” he said, adding that the farmers’ body will press for a bigger deal.

Published on December 23, 2019
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