In May 2019, chief minister Devendra Fadnavis okayed a Rs 4.24 lakh crore annual credit plan, which included a Rs 87,000 crore credit plan for agriculture. He told the banks to be sensitive towards the farmers and give them maximum loans in order to achieve the target.
As of 15 September 2019, however, only 45 percent of the targeted crop loan disbursement for Kharif crops has been achieved in Maharashtra, while the season is about to conclude. In the agrarian regions of Marathwada and Vidarbha, the targeted disbursement is worse — at 31 percent and 41 percent — respectively.
Dwindling agriculture credit – of which crop loan disbursement is a major part – is an imperative aspect of the agrarian crisis. And it has worsened under the current the BJP-led Fadnavis government. In June 2017, the chief minister announced a farm loan waiver of Rs 34,000 crore — the "biggest ever" — which triggered the slide. The financial year of 2017-18 clocked a minus 50 percent of year-on-year growth in terms of agriculture credit disbursement, according to this report of SLBC released in May 2018. 2018-19 witnessed marginally better disbursement of crop loans at Rs 31,237 crore, but still down from what it was in 2016-17.
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 initial draft of the loan waiver had too many 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 eventually, but it prolonged the implementation of the waiver, for the banks could not give further loans until the existing ones were cleared.
Parth MN spoke to Shiv Sena leader and Minister Of State for Revenue Sanjay Rathod about the manner in which farm loan waiver were imposed by the Maharashtra government, and its consequences. Rathod conceded that the implementation could have been better, and it might hamper the ruling alliance in the Assembly elections. The results are due on 24 October. Here are the edited excerpts from the interview:
When the Chief Minister announced the farm loan waiver in June 2017, did you think even after two years, it would not be completely enforced?
Not at all. We didn’t think it will take so long. In fact, farmers had to suffer a lot because of the farm loan waiver and several farmers have still not received the relief package. Some have received inadequate amount, some didn't even feature in the list. We will follow up on these grievances.
Essentially, the implementation of the waiver could have been better.
Was the government unprepared when it declared the waiver?
The state announced it. But then there is an administrative process. That failed, I think. State had backed the waiver and devised a policy. But we didn’t get the required information on time. At times, it was incomplete. These were the loopholes we had to deal with.
Bank officials said state government did not release list of beneficiaries promptly. The banks can only waive off farm loans when the state gives money to the bank, isn't it?
To be able to release the list of beneficiaries, we first need information of all the farmers that comes from different government departments, or banks. The monitoring system here could have been more vigilant. And that’s why farmers have still not received the relief package.
Couldn't the chief minister and the state government have monitored it better?
Yes. The state government, in a sense, the ministers handling the concerned ministries that dealt with farm loan waivers could have taken more of an initiative by talking to the guardian ministers of various districts. I am the guardian minister of Washim. I do not have as much complaints from farmers because I have followed up in my district. But my Assembly constituency is in Yavatmal, where I found the farmers were struggling. When we campaigned in my constituency, the farmers were upset with us. I have told the chief minister as much.
After farm loan waiver was announced, the banks virtually stopped disbursing crop loans which intensified the farmers’ problems. Do you think loan waiver was counter-productive?
Yes. Nationalised banks did not cooperate like they should have. We held meetings with them, even the chief minister was frustrated with them 2-3 times. But we didn’t get the kind of response we expected.
Even now, in May 2019, Chief Minister gave targets to the banks regarding crop loan disbursement. But they are nowhere near fulfilled.
Again, nationalised banks are not ready to give credit to farmers. Farmers own farmlands. If the land costs Rs 10 lakh, you can give a crop loan of Rs 1.5 lakh. But the banks have a commercial perspective. They think giving loans to farmers is inviting losses. Our farmers are really frustrated with nationalised banks.
If the banks can disregard the chief minister’s targets without any consequence, then what is the point of setting these targets?
I agree. There is no point. A policy has to be decided from the top. It could come from finance minister at the Centre or the Reserve Bank of India. At the most, the state can withdraw the money that we deposit through various schemes from these banks. But if you withdraw from one bank, you have to deposit it in another. And all the banks have similar approach.
The nationalised banks are not keen on disbursing loans to farmers. And district cooperative banks are financially struggling. In that context, what has the government done in the past five years to strengthen financial institutions in rural Maharashtra?
We didn’t do much, which is why these problems exist. Everything is related to banking. Every government scheme, subsidy goes through the banks. And nationalised banks are not ready to cooperate with the state government of Maharashtra. And I have told that to the chief minister. We introduced a long-term and short-term policies, but they did not satisfy the farmers. They are angry with us.
If you are re-elected, are you looking at any alternative sources of credit in the next five years?
That is what needs to be done.
Why didn’t it happen in the past five years?
We kept telling nationalised banks. We held meetings with concerned officials. But we didn’t get the response we expected.
What is the plan for the next five years to solve this issue?
Unless we find an alternative, farmers won’t be empowered. They spend days chasing a crop loan, and when they don’t get it on time, it means their entire cropping season goes down the drain.
Do you think this issue affected the elections?
Yes, surely. We have suffered. At least, I have. I don’t know about others.
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Updated Date: Oct 22, 2019 19:34:10 IST