Naidu mum on farm loans from private lenders

Farmers who borrowed from private lenders are in distress

Hyderabad: Andhra Pradesh Chief Minister N Chandrababu might have a smooth ride to power by announcing loan waiver to the farmers, but he had ignored a crucial section of farmers or lease holders who walked into the trap by borrowing from private money lenders.

According to Agriculture Minister P Pulla Rao, 43 lakh farmers, who had availed loans up to December 2013, were to get the benefit of the loan waiver at the rate of Rs 1.5 lakh per family. But in the budget, the government allocated only Rs 5,000 crore when the actual need is Rs 1.56 lakh crore. If this is the amount drawn from the scheduled and cooperative banks, what could be the amount drawn from the private lenders by the small farmers and the lease holders, a question need to be answered by the government.

According to studies conducted by economic department of Andhra University, 13 districts of Andhra Pradesh has 80 lakh farmers, and of them, 43 lakh farmers would be getting the waiver benefit. The remaining farmers including 25 lakh lease holders had borrowed money from private lenders in phases at the rate of 8 percent interest.

Studies also revealed that big farmers, mostly having connections with the political leaders, borrow money from banks and lend them to the lease holders. Though these farmers get the waiver, they still collect their dues from the lease holders, sometimes applying arm-twisting methods.

“Most of the suicides are linked to private lenders. Those who borrowed from banks either get their loan waived or rescheduled. But the poor lease holders take the extreme step unable to bear the harassment of the lenders,”' said Prof P Prasada Rao of Andhra University, who conducted studies on the distressed farmers.

Prof Rao, a specialist in agro economics, said non-institutional finance would be five times more than the money lent by the scheduled banks and cooperative banks.

Senior CPM leader K Malla Reddy said what Chandrbabu Naidu had offered was peanuts compared to the funds pumped by private agencies. He said the Chief Minister was deliberately ignoring the fact that the crisis in agriculture was due to the market forces that brought down the remunerative prices and not drought or floods.

Another senior CPM leader Ch Narsinga Rao said the government earlier had advised the farmers to go for cash crops, who were accustomed to food crops only without advising them on the market economy.

He said though the agriculture contribution to GDDP had come down considerably over the years, the people’s dependency on agriculture remained the same.