Monday, January 12, 2009

Loan waiver brings little cheer to Vidarbha farmers

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Loan waiver brings little cheer to Vidarbha farmers
12 Jan 2009, 0028 hrs IST, Abhiram Ghadyalpatil, ET Bureau

MUMBAI: The Maharashtra government has doled out another debt waiver to farmers but the critical region of
Vidarbha is not happy.

The Rs 6,208-crore loan write off that the Ashok Chavan government announced recently has brought little cheer to Vidarbha, the region where six crisis-ridden districts saw 1,139 farmers committing suicides in 2008, according to farmers’ organisations and

In the Rs 6,208-crore package, Vidarbha's share works out to only around Rs 1,000 crore, critics of the package claim. Their grouse is that the relatively prosperous region of Western Maharashtra, which has not reported farm suicides on the scale of Vidarbha and Marathwada, takes away the largest almost half the outlay at Rs 3,000 crore.

Farmers in the Marathwada region have got a share of Rs 1,800 crore, the sources said while the Konkan region, where the outflow of agriculture credit is minimal in the state, has got debt worth Rs 200 crore waived off.

“This a gross injustice to Vidarbha once again. The agrarian crisis is most severe in Vidarbha and Marathwada. These are also the main cotton growing regions, where the cotton farmers are committing suicides. But Vidarbha and Marathwada have been given a raw deal in this package as well," said farmers' leader Vijay Jawandhiya who is based in Wardha district of Vidarbha.

Mr Jawandhiya also referred to the earlier three relief packages — Rs 1,075-crore sop declared by the state government in December 2005, Rs 3,750-crore rehabilitation programme announced by the prime minister in July 2006, and the mega debt-waiver package of Rs 71,000 crore set afoot in February 2008.

The Rs 6,208-crore package grants of waiver of loans up to Rs 20,000 and a partial relief on loans more than Rs 20,000 in the form of concession on principal amount.

“The state government's package and Prime Minister’s programme did not write off debt and there were hardly measures to extend immediate assistance to farmers. Though the debt got waived last year, not more than 30% farmers in Vidarbha got benefit," Mr Jawandhiya said.

But Sudhir Goel, principal secretary, co-operation, pointed out that Vidarbha farmers had received maximum benefit in the sense their debt had been waived in proportion of credit outflow in the region.

"In absolute terms, figures prove that Vidarbha and Marathwada have actually benefited from the relief package. In Western Maharashtra, the loan disbursement has been more as compared to Vidarbha and Marathwada. But there, the loan repayment has also been better than Vidarbha and Marathwada.

The amount of agriculture debt waived off in Western Maharashtra is higher because farmers there have got 65% of the total formal credit allocated to Maharashtra over the years as compared to Vidarbha at 18% and Marathwada at 15%.

But the package has covered only half of the 65% credit in Western Maharashtra since the other half has been repaid. In contrast, Vidarbha, Marathwada, and Konkan have got a bigger chunk of their outstanding debt written off," Dr Goel told ET.

In the Rs 71,000 crore package, the centre waived off crop loans that had become outstanding on March 31, 2007. Small and marginal farmers holding up to 5 acres of land got their debt waived off while farmers with bigger land holding got a 25% concession if they settled the remaining 75% of their debt in one instalment.

In Maharashtra, the package covered around 35% farmers--37.5 lakh--who got debt worth Rs 7800 crore written off. Activists in Vidarbha have been claiming that even the Rs 71,000 crore package helped more number of farmers in Western Maharashtra and Khandesh since land holding in these regions is lesser than that in Vidarbha.

"This was the reason why farmers in Vidarbha demanded a clear-cut debt waiver irrespective of land holding. In Vidarbha, average land holding is more than 5 acres but average per head debt is less than Rs. 50,000. This demand was backed by Pune University vice-chancellor Dr Narendra Jadhav who submitted a report to the state government. But the state government has let down Vidarbha once again by not accepting this recommendation," Mr Jawandhiya said.

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