After crop failure, Vidarbha farmers in Maharashtra crippled by note ban
After failed crops, farmers in Vidarbha are facing great difficulty in accessing any cash in a region ravaged by a decades-old agrarian crisis and a spate of farmer suicides.
Kalawati Bandurkar had thought her hardships had ended in July 2008 when Congress vice-president Rahul Gandhi visited her, propelling her to national headlines.
In a speech in Parliament, the Congress leader promised to empower her and thousands like her with progressive policies such as the India-United States nuclear deal.
Overnight, her humble house in Maharashtra’s parched Vidarbha region was swarming with journalists and Congress workers offering her financial assistance. She was given a fixed deposit that was supposed to give her Rs 14,000 every month – just enough to sustain her family of seven.
But the government’s shock recall of Rs 500 and Rs 1000 notes over a month ago has left her a pauper again. The 61-year-old is having great difficulty in accessing any cash in a region ravaged by a decades-old agrarian crisis and a spate of farmer suicides.
“I have travelled 25km to my bank at least ten times but got money on only three occasions – Rs 2,000 twice, and Rs 3,000 – and that too in Rs 2,000 currency note,” says an agitated Kalawati, a resident of Jalka village in Yavatmal district.
She lost her husband Parshuram in 2005 after he committed suicide, unable to bear the burden of crippling debts and back-to-back crop failure.
He had borrowed Rs 25,000 in crop loan from a local bank and more than Rs 1.50 lakh from private money lender. With the debts still not paid and little cash coming her way, Kalawati is wondering how to make ends meet.
The government usually waives off loans if farmers kill themselves. But Kalawati said that has also changed. “When I went to the bank on December 2, I was told the bank deducted Rs 10,000 from my account as repayment of a crop-loan taken by my husband in 2004,” says Kalawati.
She isn’t the only one. Millions of crisis-ridden farmers across the Vidarbha region are caught in a pincer grip between the banks and local money lenders who are the mainstay in an economy broken by years of crop failure.
Moneylenders – who govern the local economy by lending small sums without solid collaterals as demanded by banks – have also been badly hit by the demonetisation move.
“People are approaching us and are even ready to pay 5% more than the usual 25% interest. But we are unable to pay them in cash,” says a money lender of Karanja who runs an agro-input centre.
Farmers say since the high-value currency was scrapped, they have had to sell their produce at a loss, further squeezing their economic condition in a region that has seen more than 3,000 agrarian deaths in the past four years.
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At least 300 farmers have killed themselves this year in the six districts – Amravati, Yavatmal, Wardha, Washim, Akola and Buldhana – that comprise the Vidarbha region. Many of them have little access to the formal banking system and have killed themselves because of poor irrigation, persistent crop failures and debts as little as Rs 10,000.
Nemilal Bais of Hiwra village says he has had to sell raw cotton at a throwaway price of Rs 4,100 per quintal as against the market rate of more than Rs 5,100 as he insisted on cash payments. “I borrowed Rs 84,000 from the bank but because of crop failures, couldn’t pay it for the past two years. Hence this year, I decided to sell at lower price to pay the money and save my family,” he says.
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“The harassment by banks for loan payments may even compel several farmers to suicide.”
Satish Bajoria, a middleman at a cotton market at Pandharkawda, and also a moneylender, says several farmers are holding their produce as buyers fail to give cash to them for the produce. “Despite it being the harvest season, the transactions in cotton market has been badly,” he pointed out.
State agricultural mission chief Kishore Tiwari admits the demonetisation move has hit farmers, agriculture produce market committees and farm produce transporters ahead of a bright wimnter crop prospect across the state.
Payments at agro-produce markets are currently at only 10% levels in buying seeds for the rabi season. Other marginal farmers in suicide-prone villages say they are finding it difficult to pay labourers to work in their fields and complain of a cash crunch in buying seeds and fertilisers.
This is Part 4 of our ongoing series on the effect of demonetisation on rural India. The earlier parts focussed on Sunderbans, Bastar and Jammu & Kashmir.