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| Slow transition from farming to non-farming? |
Recently there have been report of a farmer committing suicide in Amravati for being denied a loan from a nationalized bank and subsequent action against the errant branch manager for refusal of the "birth right" of the farmer. To make matters more interesting, the Amravati District Collector in a rare and extremely proactive, heroic, and brave act ordered criminal proceedings to be initiated against 24 branch managers for failing to achieve the agricultural loan targets. Here is the story for you to read. This act of bravery worth a medal is being repeated by the Amravati DC's counterparts in other districts also, probably at the behest of the Maharashtra government who thinks that bankers are the root cause of all the problems that farmers are facing. And unfortunately our regular media is too silent about these vexed issues that our country is facing and instead is more interested in the future ratings & earnings of Salman Khan's new flick, Bajrangi Bhaijaan.
So, here is the what, where, why, and how of the problem - an Ethmos perspective
It is not an open secret that Bharat has predominantly been an agrarian economy - if not in the size of production, then at least in the sheer number of people working in this sector, even though the returns are very erratic (99.99% dependent on weather conditions rather than systematic planning) - and that, friends, is the root cause of all the problems - unlike the poor bankers (who are public servants serving over there, many a times more than 1000 km away from their family) as what the Maharashtra government thinks. Even after nearly 68 years of independence, we are still dependent on the rain for the agricultural production. There had been many irrigation schemes, power schemes, etc. for the rural sector but none of them really took off primarily because of bureaucratic red tapism and mass corruption in government departments (We hope our beloved Amravati Collector shows the same pro-activism and bring to book all the accountable officials in the myriad of government departments for "not doing their duty."). What ultimately happens is that the poor Bharatiya farmer incurs loss due to multiplicity of environmental factors including but not limited to global warming, hail storms, untimely and unwanted rains, excess or shortage of rains, water level dipping in borewells, and not to mention, the corruption in government departments from procuring an electric connection for borewell pumpset, selling of their agricultural produce in public markets (APMCs) wherein nothing moves without the middlemen, and last but not the least, NONPAYMENT OF SUGARCANE PAYMENTS BY SUGAR FACTORIES (which are owned by our "poor politicians")...whew..that's a hell lot of trouble for our poor farmers. Now all these problems lead to huge losses to the farmers who are always running in a deficit vis a vis their profits to expenses. So, what is the solution left? - Simple, to pump in more capital into their agricultural business. And from where does this capital comes?? Banks??? Ultra wrong !!! THE MONEY LENDERS of course. And who are these money lenders? They are the local village big wigs, normally local leaders or big farmers and sometimes even local goons, who are having acres and acres of land in a multitude of names and virtually rule the village like their private fiefdoms. And they come to the "rescue" of these distressed farmers by lending them the crucial capital at a "marginal" interest rate of only 36% to 48% per annum compounded monthly! This turns out to be 3% to 4% monthly rate of interest - nearly 4 to 5 times what the banks charge. And how do they lend? Simple - they do the agreement to mortgage of the poor farmers' lands at a price of hardly 30% of the market value. In reality, this lending is nothing but a slow and dirty process of gradually annexing the land of the poor farmer and converting the "owner farmer" to a "landless farm laborer" farmer. This process is slow because the lending cycle continues for around 2 years by which time, the debt on the farmer would have increased to nearly 2 to 3 times of the principal borrowed. Now the hapless farmer has no other way than to approach the banks (he should have done so at the onset but many a times due to the documentation & paperwork process involved, they think it easier to approach the money lender to get "easy & hassle-free" credit not knowing the consequences of falling into the deadly debt trap). When he approaches the bank, another set of problems are faced.
The nationalized bank's banker is already a pressurized individual having to make a fine balance between achievement of targets (including but not limited to deposits, advances, insurance, "n" number of Prime Minister Yojanas, & various social welfare schemes) and following of the crucial "systems and procedures" set out by the bank/government themselves - which include a "critical appraisal of the loan application" and wherein there are hundreds of columns to fill in asking details about the water availability, the profitability of the agriculture loan, the repayment capacity of the borrower, etc. etc. and if any wrong information is fed and if the loan is somehow not repaid & becomes an NPA, then the banker will be banged and hanged to death by the bank and government alike. When a distressed farmer approaches another distressed banker, a majority of the times, the farmer does get the loan but the loan amount is so small that he could hardly pay the interest of his money lender's debt. The reason for the lesser loan amount is again government apathy because the rates of loans, especially Kisan Credit Card (KCC), are fixed by the government only on an annual basis and the rates fixed are, most of the times, hardly 50%-70% of the actual cost of running the business. All this ultimately leads to the "annexation of his land via sale" at a price hardly 30% of the market value by the "helping" moneylender. The poor and hapless farmer has no other option left than to end his life rather than live a life as a farm labourer for the rest of his life.
So, my dear friends, we have tried to shorten the story as much as possible but the complete story also includes the huge corruption that the poor farmer faces in various government departments and the APMCs wherein the commodity prices fluctuate like basketball, totally controlled by the middlemen.
Finally, we at Ethmos, totally and unconditionally support the stand of the Maharashtra government and all the district collectors in disciplining the "dirty bankers" and would like to give them more creative ideas to spread this league of morality to other departments also so as to cleanse our society of all its ills. So, here are a few suggestions from our part:-
1. Don't just read but IMPLEMENT the Money Lenders' Control Act in all the states (the act DOES EXIST in each and every state) but guess how many have so far been booked for the death of a farmer?? If all the collectors do some field work or let their "hard-working Talati/Patwaris" do the field work, it is a matter of just a week to know the local moneylender in your district and initiate the action. But let us just warn you - it will not be as easy as booking the poor banker because the moneylender will be a big shot of his own district and collecting evidence against him/her will be a difficult task. But then we have full faith in our ultra-strong, fearless, and morally upright bureaucrats.
2. Initiate action against all the sugar factories in your district who have not paid the sugarcane arrears to the farmers. Do the forensic audit of their financials and know the cash accruals. Regardless of whether they earn a profit or not, they are morally bound to pay the farmer their correct dues and that too, ON TIME. If they were not going to pay them, why did they procure the cane from them? And what did they do with the cane for 1 to 2 years? Sat on it to incubate and create more "canelings"?
3. Initiate action against every electricity board/company official who makes a delay in installing electricity connection for pumpsets to farmers. Make the system online and outsource it to some agency so that the corruption is completely finished. Make the Junior Engineer (Electric Supply) accountable for not supplying the electricity on time.
4. Direct the income-tax department to implement Section 269SS (no person is suppose to pay/take more than Rs. 20,000/- to another person by any manner other than an account payee cheque). If implemented, all the moneylenders can be nailed because they all transact in HARD CASH.
5. Direct the RBI and the Board of the Banks - to issue clear guidelines regarding loan recovery policy for agriculture, government-sponsored, and priority sector lending so that the appraising official of the bank is held indemnified against non-repayment by the borrower under normal conditions (i.e. except in fraud cases). This will instill the confidence in the lending officials of the bank to fearlessly sanction credit to needy persons.
6. And last but not the least - DO UNDERSTAND that the money that the banks are lending does not belong to the bank but the PUBLIC. Bankers are nothing but guardians of this public money and when any banker initiates any recovery proceedings, s/he is doing the same to safeguard the public money only and not to take the money to his home and buy new jewelry for his wife or girlfriend. If the public money taken as loan is not repaid, then how will the banks repay the depositors' money which they have taken for safekeeping?
If corrective steps are not taken immediately, the day will not be far when we will be faced with financial irregularities and the ultimate collapse of our financial institutions and the faith of the public in these institutions as caretakers of their money is completely lost. We apologize for any hurt caused to anyone or any institution by this article but our aim is to bring in the harsh realities and the bitter truths in front of the government as well as the public.
Happy Ethmos to all.
1. Don't just read but IMPLEMENT the Money Lenders' Control Act in all the states (the act DOES EXIST in each and every state) but guess how many have so far been booked for the death of a farmer?? If all the collectors do some field work or let their "hard-working Talati/Patwaris" do the field work, it is a matter of just a week to know the local moneylender in your district and initiate the action. But let us just warn you - it will not be as easy as booking the poor banker because the moneylender will be a big shot of his own district and collecting evidence against him/her will be a difficult task. But then we have full faith in our ultra-strong, fearless, and morally upright bureaucrats.
2. Initiate action against all the sugar factories in your district who have not paid the sugarcane arrears to the farmers. Do the forensic audit of their financials and know the cash accruals. Regardless of whether they earn a profit or not, they are morally bound to pay the farmer their correct dues and that too, ON TIME. If they were not going to pay them, why did they procure the cane from them? And what did they do with the cane for 1 to 2 years? Sat on it to incubate and create more "canelings"?
3. Initiate action against every electricity board/company official who makes a delay in installing electricity connection for pumpsets to farmers. Make the system online and outsource it to some agency so that the corruption is completely finished. Make the Junior Engineer (Electric Supply) accountable for not supplying the electricity on time.
4. Direct the income-tax department to implement Section 269SS (no person is suppose to pay/take more than Rs. 20,000/- to another person by any manner other than an account payee cheque). If implemented, all the moneylenders can be nailed because they all transact in HARD CASH.
5. Direct the RBI and the Board of the Banks - to issue clear guidelines regarding loan recovery policy for agriculture, government-sponsored, and priority sector lending so that the appraising official of the bank is held indemnified against non-repayment by the borrower under normal conditions (i.e. except in fraud cases). This will instill the confidence in the lending officials of the bank to fearlessly sanction credit to needy persons.
6. And last but not the least - DO UNDERSTAND that the money that the banks are lending does not belong to the bank but the PUBLIC. Bankers are nothing but guardians of this public money and when any banker initiates any recovery proceedings, s/he is doing the same to safeguard the public money only and not to take the money to his home and buy new jewelry for his wife or girlfriend. If the public money taken as loan is not repaid, then how will the banks repay the depositors' money which they have taken for safekeeping?
If corrective steps are not taken immediately, the day will not be far when we will be faced with financial irregularities and the ultimate collapse of our financial institutions and the faith of the public in these institutions as caretakers of their money is completely lost. We apologize for any hurt caused to anyone or any institution by this article but our aim is to bring in the harsh realities and the bitter truths in front of the government as well as the public.
Happy Ethmos to all.
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