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Agrarian distress: Farmer suicides and the collapse of cooperative credit institutions -Partha Sarathi Biswas
-The Indian Express

The incidence of farmers taking their own lives is higher in regions where cooperative banks are the weakest.

Nanded (Maharashtra): The verdant soyabean fields at Digras today are a far cry from the barren landscape they presented only a few months ago. But for residents of this village in Ardhapur taluka of Nanded district, the memories of drought in three out of the last four years will not fade away that soon. Epitomising this suffering is Laxmibai Kshirsagar, whose husband Dyaneshwar committed suicide on April 14, 2015 by jumping into a well. He was driven to it by failure to repay loans of around

Rs 3 lakh, including Rs 30,000 from a private moneylender and the remaining 90 per cent taken from the State Bank of India.

“Our crops had failed for consecutive years, but neither the moneylender nor the bank’s loan recovery agent was willing to listen. He took his life in sheer desperation,” recounts Laxmibai, who has five daughters, the eldest of them 13 years old, to take care of. The only straw of hope she is latching on to is the soyabean crop on her tiny one-acre holding, which looks decent as of now, thanks to the good monsoon rains this time. But she is under no illusion that it will help repay the loans of her husband: “I was told they would be written off, but it appears now that it is not going to happen”.

Dyaneshwar Kshirsagar’s isn’t the only case of a farmer resorting to suicide because of inability to discharge loan dues to a state-owned bank. Tulsidas Mandwad, a 3.5-acre farmer of Kakandi village in Nanded taluka and district, killed himself on November 30, 2014. He had two outstanding loans from a nationalised bank. The first one was a Rs 80,000 crop loan that he had directly availed. The second was a loan his grandfather had originally taken some 20 years back and did not pay while he was alive. Since Mandwad’s father had also died young, the burden of repaying the loan, which had mounted to Rs 40,000, fell on the 25-year-old. “The successive crop failures, together with harassment from the bank for the old loan as well, were too much for him to handle,” notes Shyamsundar Janapur, a relative of Mandwad.

Kishore Tiwari, chairman of a task force constituted by the Devendra Fadnavis government in Maharashtra to address issues relating to agrarian distress, is emphatic in blaming nationalised banks for the rising trend of farmer suicides in the state. “They have no qualms in writing off debts owed by big corporates, but harass farmers to death even for paltry crop loans of Rs 50,000,” he alleges.

Related to this is the phenomenon of the marginalisation of district central cooperative banks (DCCB) and primary agricultural cooperative credit societies (PACS). They accounted for roughly 39 per cent of the total crop loans of Rs 40,581 crore disbursed in Maharashtra during 2015-16, despite their covering 62 per cent of the state’s farmers who had access to institutional credit. Scheduled commercial banks, in contrast, had a lower reach, but had a 61 per share cent of the overall crop loan disbursals.

Farmer leaders draw a link between rising agrarian distress and weakening of the cooperative agricultural credit system. Maharashtra has on paper 21,185 village-level PACS that are supposed to meet the requirements of its 1.36 crore-odd farmers. But the truth is that about 34 per cent of farmers in the state do not even have access to institutional crop credit, while there are hardly 7,000 functional PACS actively engaged in disbursal of seasonal agricultural operations loans. State-owned banks haven’t really been successful in filling the resultant vacuum.

According to Prahlad Ingole, Nanded district president of Swabhimani Shetkari Sanghtana, a farmers’ union, it takes just 7-8 days for any crop loan application to be sanctioned by a PACS, which, in turn, obtains its funds from the DCCB concerned. “Before the start of the season, the PACS will place the credit demand for the entire village before the DCCB, based on the Kamal Maryadit Patra (loan deed) executed by the former with individual farmers against their 7/12 land rights records. The DCCB extends the money which is, then, disbursed to the farmer. It is a smooth affair, unlike with commercial banks where the minimum time for sanctioning of loans is 1-1.5 months,” he says.

Banks also followed very bureaucratic and detailed documentation procedures. “Farmers have to submit the Pik Perni or sowing report that is issued by the village officer (talathi) on a Rs 200 bond paper. Besides, there is requirement for two witnesses along with a search report on the land by a lawyer,” adds Ingole. Commercial banks often have no branches at the village or even taluka means. It means farmers being forced to travel to the district headquarters multiple times for availing crop loans or employing agents to handle all the paper work and formalities. “At the end of it, we might spend Rs 50,000 for getting a loan of Rs 2-2.5 lakh,” complains Ravi Patil Kshirsagar, who farms five acres in Digras village.

Neither Digras nor Kakandi — or for that matter, most villages in the Marathwada and Vidarbha — have functioning PACS. Farmers in these regions are, therefore, rendered vulnerable both on account of drought as well as inability to avail timely crop credit. It isn’t surprising, therefore, to find a close association between farmer suicides and the state of the cooperative credit system.

In 2015, Maharashtra recorded 3,228 farmer suicides, of which 1,541 were in Vidarbha (both Amaravati and Nagpur divisions) and 1,130 in Marathwada (Aurangabad, Jalna, Beed, Parbhani, Hingoli, Osmanabad, Latur and Nanded districts). Further, as the accompanying tables show, the districts topping in farmer suicides also had the DCCBs with highest ratio of non-performing assets. On the other side, those with better-functioning DCCBs/PACS had lower incidence of farmer suicides.

“Reversing the trend of rising agrarian distress requires nationalised banks changing their way of functioning in order to expand rural outreach and also revival of the cooperative credit system, especially DCCBs,” points out Tiwari. His diagnosis may be just right.