Twenty-five-year-old Mukesh Jhine applied for a crop loan on 24 July earlier this year. “The monsoons arrived late so we began the sowing process accordingly,” he said, sitting by the family‘s three-acre farmland, which is in his grandfather’s name. Mukesh gathered the required documents of his 80-year-old grandfather, prepared the file and submitted it to the local branch of Bank of Maharashtra. Last week, he said, the bank called and rejected the loan application, citing the age of his grandfather. He is too old, they said.
In the meantime, the family knocked on the doors of a private moneylender to raise capital for the Kharif season. “We borrowed Rs 25,000 at 5 percent per month,” he said. “We implored the shopkeepers to sell se and pesticides on credit. He did, but when they know you are desperate, they sell you low quality product that no one else buys. It has an impact on the overall yield.”
Mukesh is a resident of Harshi Bk, a village in Aurangabad‘s Paithan district of Maharashtra and his ordeal is a representation of the condition of majority of the farmers in the rural areas of the district.
In May 2019, Maharashtra Chief Minister Devendra Fadnavis okayed a 4.24 lakh crore annual credit plan, which included Rs 87,000-crore credit plan for agriculture. He urged the banks to give maximum loans to farmers by being sensitive in order to achieve the target. “Crop loans are meant to save farmers from private borrowing. We need to understand the socio-economic aspect. Agriculture is the most important aspect of our economy and contributor to the GDP,” he reportedly added after the 143rd meeting of State Level Bankers’ Committee (SLBC), an inter-institutional forum for coordination and joint implementation of development programmes and policies by all the financial institutions, where government officials are also included.
But the chief minister’s appeals have had little impact on ground. The data on the SLBC website pegs the targeted crop loan disbursement in Aurangabad at over Rs 1,400 crores for the Kharif season. However, till 15 September 2019, only 39 percent of the target has been met. In the agrarian region of Marathwada — of which Aurangabad is the capital — the disbursement is even more abysmal at 31 percent, 14 points below the state’s average.
Farming is a time-bound profession. “If the crop loan is not sanctioned in time for sowing, it is useless,” said Mukesh, who cultivates cotton on his farmland. “There is no point in providing water to a man after he dies of thirst. If we do not sow on time, the entire season is wasted. In Marathwada, financial institutions are getting inaccessible by the day, compelling us to borrow money at exorbitant interest rates from moneylenders.”
Erratic rainfall this season has meant the cotton crop is stunted, and the harvest would be half of what it is in a decent year. “Three acres will throw about 20 quintals of cotton,” he said. “It won’t be enough to repay the moneylender.”
Cotton is the primary crop in Aurangabad and covers the most cultivated area. Orchards of sweet lime (mosambi), pomegranates, and oranges are among other prominent crops. However, farmers are phasing out orchards, due to eccentric weather, and lack of credit-raising facilities. Maharashtra‘s credit disbursal has been inadequate for more than a decade. However, it has worsened in the years since the BJP-Shiv Sena combine took charge of the state.
In June 2017, the chief minister announced the “biggest-ever” farm loan waiver of Rs 34,000 crore, which triggered the slide. According to the May 2018 report of SLBC, the financial year of 2017-18 clocked a minus 50 percent of year-on-year growth in terms of agriculture credit disbursement.
The target was to achieve Rs 54,221 crore of crop loan disbursement during 2017-18, but it only managed to disburse Rs 25,322 crore, which is 47 percent of the target, and more importantly, down by 40 percent from Rs 42,173 crores disbursed in 2016-17. Crop loans constitute a major part of agriculture credit.
The SLBC report specifically noted that the “reasons for low credit off take this year can be attributed to the announcement/implementation of farm loan waiver scheme by Government of Maharashtra“. The year 2018-19 witnessed marginally better disbursement of crop loans at Rs 31,237 crores, but still down from what it was in 2016-17, which is insufficient considering the inflation.
Pasha Patel, a senior farm leader and chairman of Maharashtra Commission for Agricultural Costs and Prices, said the District Cooperative Banks are struggling financially, and nationalised banks are not keen on distributing credit to farmers, for it is a loss-making profession. “Banks do not treat farmers well,” he said.
The initial draft of the loan waiver had several caveats — it ended up marginalising farmers who needed it the most. It riled up farm activists, which led to severe agitations. Fadnavis gradually withdrew some of the conditions one after another, but it prolonged the implementation of the waiver because the banks stopped giving further loans until the existing ones were cleared. Only Rs 18,000 crores of farm loans have been waived in the last two years.
Patel said that the state had applied several restrictions (or filters) so the genuine farmers on the ground would avail the benefits. “In 2009, farmers in Marathwada and Vidarbha hardly benefited from the farm loan waiver,” he said, and added, “In Western Maharashtra, however, where hardly any farmers committed suicide, maximum farmers benefitted. We did not want to repeat that.”
But that does not reverse the growing troubles of a farmer.
Forty-year-old Sakhubai Phasale, a cotton farmer in Rahatgao which is 15 kilometers from Harshi Bk village, received her farm loan waiver of Rs 1.38 lakh a year after the announcement. It meant she could not apply for a fresh loan last year. The bank would not release it until she had a clean slate.
After recieving the waiver, Sakhubai and her husband Rajendra (43) applied for a crop loan in May 2019, keeping in mind the upcoming Kharif season. “But the bank accepted the file only in August,” she says. “The bank kept telling us there is a long waiting period. We still haven’t heard back.”
The effects of credit crisis are stark. Travelling through the barren fields of rural Aurangabad, the disillusionment among farmers is palpable. However, even more palpable is the conspicuous absence of state opposition or its cadres and their inability to capitalise on the issue. Given that farm loans and agricultural credit is one of the leading issues in the upcoming Assembly elections, most farmers said they have not heard from or seen opposition leaders in their villages.
Despite the looming crisis, the ruling party, on the other hand, has a chief ministerial-face and the cadres are campaigning pretty heavily in the state. The Opposition is lagging behind in both these regards.
Aurangabad, the erstwhile capital of Nizam, has nine Assembly constituencies, six of them are rural. They go to elections along with the rest of Maharashtra on 21 October. Currently, four of the six seats are with BJP-Shiv Sena combine government. Ambadas Danve, one of the prominent Shiv Sena leaders in Aurangabad, is confident that the alliance will be improving its performance this election. “The crop loan disbursal has been poor,” he conceded. “But the state can only appeal to the banks. We cannot force them. However, we continue to take up farm issues. We have gheraoed bank managers, agitated in front of banks. Our cadre is active in rural areas.”
Much like most of the state, Shiv Sena’s cadre continues to remain strong in Aurangabad, which has been party’s stronghold since the mid 80-s. Aurangabad-based senior journalist Suhas Sardeshmukh said that the Hindu-Muslim riots of 1985-86 helped Sena penetrate the city. “After establishing itself in the city, they expanded in rural areas. All said and done, people in Aurangabad are religious. Sena leaders are often seen touching the feet of godmen, or donating food to religious entities. It helps them stay visible.”
With the population of over 35 lakh, the district of Aurangabad is a mix of communities. But the Marathas are particularly large in numbers. Most of them form the core votebank of National Congress Party (NCP). Pradeep Salunke, a senior NCP leader in Aurangabad said that the issue of farm crisis will help overthrow the Fadnavis government in the state this year. “Farmers are angry, and they are expressing their anger when we meet them,” he said, and added, “Farmers can see through the BJP’s nationalism bogey.”
When asked about the lack of visibility of the opposition cadres on the ground, Salunke said the momentum is picking up. “We are reaching out to the masses through Facebook and WhatsApp as well,” he said and conceded that the party cadre had been on their toes for a while, “But the Enforcement Direcorate’s targeting of Sharad Pawar has woken up the karyakartas.”