In Vidarbha, where debt-ridden farmers are committing suicide, banks are enticing farmers with easy vehicle loan schemes against land. A DNA Special.
YAVATMAL/CHANDRAPUR: It is the ultimate irony. In Vidarbha, where debt-ridden farmers are committing suicide, banks have announced easy vehicle loan schemes against land.
Diwakar Ganpat Ashtekar, 63, drank pesticide and died in Awalgaon village in Chandrapur district three months ago. His liabilities due to failed crop and vehicle loan stood at Rs500,000. Of that amount Ashtekar owed Rs250,000 to the State Bank of India (SBI) from which he had taken loan for a jeep seven years ago.
“We bought the jeep for transporting vegetables from our farm to a nearby market,” says his son Rajesh, 33. “But that never happened because of crop failure.”
Dilip Shende, 31, who owns a six-acre farm in Bhadumri village in Yavatmal district, enjoys riding his Hero Honda Splendor bike he bought a year back. Today he doesn't know how he is going to pay back the loan. “The crop failed this year. I wish I hadn't spent so much money on petrol,” he says with regret.
In Shende's village, the average farming household is in debt. Yet, five people bought bikes on bank loans last month. Loans of a few others are being processed.
Just a week back, Managing Director of the State Bank of India (SBI), A Rameshkumar handed over the keys of a new two-wheeler to SBI's 351st consumer. On the occasion, the bank proudly announced its target: to clear at least a thousand cases by March-end through the “Baliraja” scheme to “give dignity and improved mobility to farmers.” Other banks are not behind. They too are offering farmers easy vehicle loans.
Yavatmal, which accounts for over a hundred farm suicides that took place this season, is registering record two-wheeler sales among peasants. Here, average per capita debt stands at Rs50,000, according to a study by the National Sample Survey Organisation (NSSO).
“More than 150 bikes have come into four villages in Kelapur last month. These are villages where about ten farmers have killed themselves in this season,” says Ankit Naitam, an activist with the Vidarbha Jan Andolan Samiti (VJAS).
“The loan schemes are a sure way of pushing farmers into a debt trap,” says Vijay Jawandhia, 65, a peasant leader in Wardha.
“Buying bikes is plain foolish when we are unable to feed our families. Those who are buying bikes are headed for sure death,” says cotton farmer Pundalik Soyam, 47.
Agrees Punaji Maraskolhe, 33, who owns a 21-acre farm in Jhuli village. “I bought a Bajaj CT-100 a year ago after making a down payment of Rs15,000. I could not pay the annual installment of Rs10,000. The bank seized my bike last week.”
The deals are tempting. A farmer gets a bike on the sat-bara (7/12 extracts). In the name of giving dignity to farmers, the easy-finance schemes are being pushed as agriculture loans, meaning a bank approves a loan with strings attached. Some are interwoven with crop loans.
Explains a SBI official in Yavatmal: “The loan is treated as agriculture term loan to be repaid in equal installments in a stipulated duration of four years at 9 per cent interest rate. If a farmer fails to repay, the vehicle is seized.”
“Every year the bank increases the term loan amount and deducts the installment for the bikes. The debt burden keeps mounting,” explains Kishor Tiwari, convener of the VJAS.
Defending the schemes, Rajeev Niwal, 40, co-partner of Parvati Automobiles in Yavatmal, says: “This is a good scheme for the welfare of farmers. A bike gives mobility to a farmer, increases efficiency in supervision of farm work and gives him dignity. Not for nothing are two-wheelers in such great demand in the villages.”
Niwal says the scheme will change the farmers' lives. “It will accelerate the growth of allied businesses, like dairies.”
“Indeed it would change a farmer's life, but for the worse,” says Tiwari. “So, when P Chidambaram announces a hike in agriculture loan in budget, it's good news for automobile industry,” he says sarcastically.
Eligibility criteria for term loan are, a farmer must have a good track record in crop loan payments and own either four-acre irrigated or eight-acre non-irrigated land.
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