Checking the claim 3: Agriculture and farmers are prospering like never before!
NSSO 59th round survey reports that nearly 52% of surveyed
farmer households – amounting to nearly 2 million - were indebted in Gujarat;
with higher proportion than national average (49%) its stood 8th worst
performer.
An average amount for outstanding loan was found to be Rs.
15526, which was also higher than the national average of Rs. 12585.
Overall, 70.6% of loans were found to be taken for productive
reasons (State ranked 2nd). However, situation is worst for small
land-holders. Small land holders tend to take higher share of loans for
non-productive purposes like consumption, marriage, education and medical
reasons. The small landholders, owning less than one hectare of land, comprises
nearly half of the total surveyed farmers.
For relatively poorer
household, these kinds of non-productive loans could be of serious
implications, since the borrowed money is not being put for productive
purposes, with possibility of returns.
To
complete the picture of indebtedness, it would be important to understand the
source of these loans as well; where the farmers are borrowing from? Remember,
that the government debt-relief will only be applicable to those farmers who
have borrowed from financial institutions like cooperatives and Banks.
Source
wise, farmers in Gujarat borrowed around 42% from ‘co-operative societies’
followed by 27% from bank and 18% from relatives and friends.
Again,
small land holders seems to be not getting benefits from government approved
institutions like banks or cooperatives as major proportions of their loans
were from non-institutional facilities like relatives and money lenders.
The fact that the small farmers are
borrowing from non-institutional sources, and that too mainly for the non-productive
purposes doesn’t portray an impressive scenario. Structural and financial reforms in agriculture sector seems to be not reaching the marginal and small farmers that anyways comprise half of the total farmers.
This can certainly be an important precursor to farmer suicides, especially if the pattern of cropping is tilted towards cash crops (crop sold from the farm like tobacco, cotton etc.) and not subsistence crops (like grains, vegetables etc.), as is the the case in Gujarat.
More on farmer suicides in Gujarat in the next blog!!
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