Farming has always been a part of culture and tradition in rural India and never was treated as an industry. As long as the farming continued to be a tradition there was no need of a loan. But when farming was seen as economically viable activity, more as an industry, the need arose for more funds. To get higher production, on the same piece of land, more investment in agriculture was made with an assumption that agriculture will be a profitable enterprise and farmer will gain significantly.
In agriculture, both welfare and profit persisted together. Agriculture was taken as provider of food for the household and grains for merchants for their business. In the social set up businessman (Agricultural merchant) was considered to be the mediator between the farmer the producer, and society the consumer, or binding link between the market and people. In the past social values rather than purely the market principal of maximizing profit guided the businessman.
Agriculture has now become market oriented. It neither meets the household food requirement nor very profitable to the farmer. Ever since agricultural commercialisation has taken place the indebtedness of farmer has increased. Market based agriculture is mostly being supported by commercial credit /loans. Land as the security against loans keeps farmer as a bankable / viable client for fresh loan. Contrary to that a businessman can be bankrupt, he pockets the public money and pretend to be insolvent. A chance of farmer cheating or not repaying the loans is not a normal phenomenon. While businessman can put all his assets on stake to earn profit which farmer cannot. Consequently farmer began to take loan from traditional moneylender. As moneylender became exploitative the state came in support of farmer by providing Agricultural Credit through banks and others public institutions. Banks kept land as security against the lending and increased agricultural credit to boost the agricultural production in the country.
Today farming has become worst than business. As loans have not just turned farmers insolvent but have driven them to committing suicide. The system has been engineered to make the farmer indebted. Private and public financial institutions have come forward to provide loans under the general supervision of NABARD. The system of lending and the rate of interest charged are discriminatory against farmers. Indebtedness has become the fate of farmers?.
Present institutional system turns out to debt trap for farmers. Political parties take mileage out of this situation by waving off loans before elections as tool to win votes. This practice of waving off loans turns out to be counter productive as it makes farmers greater debtor. It is likely that this agricultural policy is sustained and grows. In this lies the system of looting, disintegrating the farmers and encouraging dominance of market. This lending system will continue till the farmers are completely divided.
There is no farmer'sleader to protect their interest and monitor the laws. Also there is a sea change in the attitude of the politicians. As in the past it used to be a matter of pride for our Prime Minister to attend farmers? meeting and conferences. But today politicians try to avoid farmers? meeting and prefer to attend CII/ business meetings, as they are well organised in hotels and better environment compare to the farmers? meetings. Profit/benefits and the market guide the participation of politicians and bureaucrats, the pillars of the system. It seems that market and profits govern the whole democratic system rather than the common man'sinterest.
The agricultural credit institutions are more interested in their profit than the farmer'sinterest and intend to perpetuate indebtedness among farmers. The commercial farming facilitates the system. 80 per cent of the Indian rural population drives their livelihood from agriculture. One fourth of the farmers are indebted. Traditionally they used to be indebted only for a crop season. As soon as crop harvest used to be theirs farmer used to clear his debt. In that system 1/10 of farmers used to be indebted for generations. Yet they were not forced to commit suicide. Contrary to that today'sagricultural credit system is so fearful that farmers are forced to commit suicide, as has been observed in most agriculturally progressive states namely, Punjab, Haryana and Andhra Pradesh. The question is who will change the system and protect the interest of large number of farmers in this country?
There is need to change the agricultural credit system from indebted to debt free agriculture. Can there be a agriculture where no loans are required, that is, Zero Budget agriculture. This type of agriculture is definitely requires less investment and also conserves water. The credit card system of America is a artificial credit system. This system support an old saying that even you are indebted buy good things and live a happy life. This loaning system is strengthening the credit institutions and weakening the borrowers. To over come the present situation the need of the time is that all borrowers should organise and look for loan-free agricultural system. The loan-free agricultural only can bring prosperity and peace in the rural India.
(The author is Magsaysay Award winner and is chairman of Tarun Bharat Sangh and Jal Biradau. He can be contacted at [email protected])