Maharashtra:Credit Crunch Forces Farmers to Mortgage Jewellery

While farmers are forced to mortgage their jewellery for bank loans at the height of the sowing season, Maharashtra government has turned a blind eye to their predicament. Banks do not have loans to hand out when the cost of agricultural inputs have skyrocketed pushing the farmers to the brink.

 

Monsoons have arrived and with it the season for sowing crops. This is the time when farmers are in need of money the most as they have to invest in the inputs, most importantly, in fertilisers without which no crop can survive. This, therefore, is also the time when the farmers expect the most from the government and administration. But the credit flow to the farmers has dried up. Usury has been banned and the nationalised banks do not have the money to dole out. There is no avenue left for the farmers to get loans and in these dire straits, they have now resorted to mortgaging the jewellery, whatever is left, of their wives and mothers to banks and moneylenders. This scenario is prevalent not just in Buldhana and Jalana districts in Maharashtra but has become endemic.

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The state government has been touting its agriculture policy but the situation is dismal. The peasants of
Vidarbha are under an immense burden. A couple of months ago, drought was the centre of much discussion and Prithviraj Chavan, the Chief Minister, had taken Rahul Gandhi on a tour of drought-affected areas. The government had promised many times to dole out a relief package to the affected farmers but nothing reached them. As the monsoons have arrived all buzz about drought and the package has calmed down. It is this callousness that has forced the peasants of Buldhana and Jalana districts to mortgage the jewellery of their womenfolk. The jewellery that these two districts have kept as mortgages in banks is worth Rs. 300 crores!
The banks in these two districts

The banks in these two districts hand out something between Rs. 250 and 300 crores of credit every year so that agriculture is not affected in any condition. Yet this year the banks are themselves in a liquidity crunch that has been imposed by the Reserve Bank of India. Consequently only Rs. 100 crores worth of credit could be handed out.

hand out something between Rs. 250 and 300 crores of credit every year so that agriculture is not affected in any condition. Yet this year the banks are themselves in a liquidity crunch that has been imposed by the Reserve Bank of India. The Reserve Bank of India has ‘stalled’ these banks from handing out any credit on the grounds that the latter have not fulfilled the central bank’s conditions. Consequently only Rs. 100 crores worth of credit could be handed out by the district banks. The deficit in credit could be made up only by mortgaging jewellery as selling land is not a viable option. The middle and marginal peasantry has been worst affected by this acute credit crunch.
In the past 2 months, farmers have got about Rs. 110 crores worth of credit from Buldhana Urban Bank, while in Jalna around Rs. 120 crores of credit has been doled out against jewellery as surety for loans. State Bank of India has given Rs. 50 crores as credit to the farmers against jewellery. Shiva Savle of Dongarshevli village says that he mortgaged the jewellery of womenfolk as a last resort, though he is quite ashamed of doing so. Vijay Wankhede, another marginal farmer, feels bad at having mortgaged jewellery, as there are emotions attached with it. He is not sure whether he will be able to get the jewellery back if the monsoons fail and the harvest is not good.

The pulls and pressures upon the peasants is threatening to tear apart, not just their physical living conditions, but also their emotional lives while the state government is running schemes to alleviate their pain and suffering only in official documents and political rhetoric. As of now, the farmers are banking on a good monsoon when a good harvest can solve their problems. Another apprehension is whether they will get adequate market price for their produce or not because the cost of inputs has spiralled so much that most of the times they are not able to realise even the production cost.

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