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In hope of debt waiver, 40% Punjab farmers refuse to repay their rabi crop loans

As many as 40% farmers of the nine lakh farmers who were disbursed Rs 7,500-crore crop loans at the onset of the ongoing rabi season in Punjab have defaulted on their dues.

punjab Updated: Apr 01, 2017 09:12 IST
Gurpreet Singh Nibber
Gurpreet Singh Nibber
Hindustan Times, Chandigarh
Punjab government,debt waiver,farmers
The average recovery of loans in the state cooperative sector is 90­95%. Huge defaults will make it difficult for Punjab State Cooperative Bank Limited to extend credit for the next season.(Bharat Bhushan/HT Photo)

As many as 40% farmers of the nine lakh farmers who were disbursed Rs 7,500-crore crop loans at the onset of the ongoing rabi season in Punjab have defaulted on their dues.

Reason: They are expecting a waiver, as chief minister Capt Amarinder Singh had promised “Karza Kurki Khatam” (end to farm debt and its recovery) ahead of the assembly elections.

Figures procured from the Punjab State Cooperative Bank Limited, which runs the statewide agriculture credit, reveal 3.6 lakh farmers have simply refused to pay back Rs 3,000 crore.

Also read | Punjab farmers give thumbs down to Budget provisions

“All efforts to make farmers pay back their loans have proved futile. They (farmers) say Capt Amarinder Singh announced a waiver in the poll manifesto,” says a top cooperative bank officer. The average recovery of loan in the state cooperative sector is 90-95%.

“Such huge default means the state cooperative credit system will be disturbed. The bank will have an uphill task giving credit for paddy sowing in the kharif season in June-July,” said another senior cooperative bank officer. Calling the farmers’ expectations too high, he said the bank needed to give the same amount (Rs 7,500 crore) as credit in the kharif season too.

Also read | The cycle of debts and farmer suicides blight India’s grain bowl

Also read | Ludhiana DC bans wheat harvesting from 7pm to 7am


Each farmer on an average has a debt of Rs 6 lakh, with the total rural debt pegged at Rs 88,000 crore. A portion of it is crop debt and the remaining belongs to social sector.

“The government needs time (to announce waiver). We have to differentiate between loan and debt. I think debt will be waived,” said chief principal secretary Suresh Kumar. He said the government will first reach out to the “most stressed section” of farmers, who are on the brink of taking drastic steps (of committing suicide).

“We are working on a (debt) waiver policy,” he said, adding the farmers should pay back the periodic crop loans they take at the onset of every crop season, so that the debt doesn’t pile. He said the state government is in the process of forming a core group of experts to deal with the issue.

When the issue was raised in the Vidhan Sabha on Wednesday, Amarinder Singh had assured the House that no debtridden farmer will face “kurki” (sale of mortgaged property). The Punjab CM has also taken up the issue of debt waiver with Prime Minister Narendra Modi and finance minister Arun Jaitley. Sources say farmers are approaching local Congress leaders who got pending-debt forms filled from the farmers before the state polls.

Out of the total Rs 88,000-crore debt, a part is owed to nationalised and privatised banks, which are forcing farmers to pay back. “These banks entered into the rural credit sector five years ago, and have advanced huge loans to farmers. Now farmers find it difficult to pay back. Our dealings with farmers have been very transparent. They pay back our loan on time,” said a deputy general manager of the state cooperative bank.

“We are not doing any forced recovery,” said state cooperative bank managing director SK Batish. “The state cooperative bank suffered due to demonetisation as we were barred from receiving old currency,” he said.


Despite the Centre’s promise to provide cash credit limit (CCL) to Punjab for procuring wheat by March 25, the funds are still awaited. The procurement of wheat will begin on April 1. The crop has started arriving in some of the 1,800 procurement centres already. The state had sought Rs 20,680 crore for procurement. Officials in the food and civil supplies told HT the CCL is expected any day.

First Published: Apr 01, 2017 09:08 IST