State gets more teeth to curb moneylenders: Maharastra clears Maharastra Moneylenders (Rules) Act 2009

THE State Cabinet on Wednesday cleared the Maha- rashtra Moneylenders (Rules) Act, 2009 for implementation in the state. This new act will replace the Bombay Money- lenders Act, 1946 that was amended in 2006. Since the last three years, the law had been awaiting a formal nod from the Central Government. Though the Central nod was received last year, the implementation of this Act got further delayed due to the elections held then.
Subsequently, this Act was re- introduced in the cabinet on Wednesday and formally cleared. The provisions of this Act will be announced in the form of a government resolu- tion after the nitty-gritties are worked out.

This act is being implement- ed in a bid to provide protec- tion to poor farmers burdened by money lenders who lend at exorbitant interest rates and is meant to cap the problem of farmers committing suicides.

Though this is considered to be a landmark move, activisits say that it will not be of much help in reducing suicides by farmers. Kishore Tiwari, presi- dent of the Vidarbha Jan Andolan Samiti feels that this legislation is too little and too late. “The moneylenders have already donned different garbs to exploit farmers. Now, they have opened shops of pesti- cides, fertilisers and seeds and sell them on credit at huge lending rates. Once the farmer is unable to pay back, they officially file a recovery suit against them,” Tiwari told FPJ.
He explained that this legisla- tion would not have much impact because children of moneylenders are now lend- ing using this position in con- juction with multi-national firms and businessmen. This gives them official sanction to lend at exorbitant interest rates. They not just lend but also are traders for buying cot- ton and soyabean. This means that the farmer ends up com- pletely dependent on him, accuses Tiwari.

Over 90 farmers committed suicide in Adilabad district: NGO

D.V.L Padma Priya
Failure of kharif crop and mounting debts stated to be reasons

 The interest rate on private loans ranges between 24 and 36 per cent
The district witnessed 15 deaths in 3 days during November

HYDERABAD: Sixty-nine farmers from Adilabad district committed suicide during the kharif season that lasted from August to November 2009 and the number grew to 93 by December 15, if reports from the non-governmental organisations and farmers’ associations in Andhra Pradesh are any indication. Failure of kharif crop and mounting debts are stated to be the reasons for the spate of suicides across the district.
A recent committee constituted by Deccan Development Society, Centre for Sustainable Agriculture (CSA), PEACE, AP Rythu Sangam and other organisations recently came up with a study report that revealed the staggering number of farmer suicides.
The committee visited around eight families in various mandals, informed G.V. Ramanjaneyulu, Director of the Centre for Sustainable Agriculture.
“In the first week of November alone, over 16 suicides were reported in vernacular newspapers and that’s when we put together this committee. The committee with the help of local media and farmers estimated that over 69 suicides had taken place during the kharif season,” he said. Confirming the report by the committee, S. Malla Reddy, vice-president, A.P. Rythu Sangham, says over 93 suicide deaths were recorded by the Sangham by December 15, 2009.
Majority of the farmers who took the extreme step had taken large amounts of private loans and micro-finance operators at high interest rate in order to cultivate cotton, revealed the report.
G. Bhojanna of Lokeshwara village in Lokeshwaram mandal of the district is one such farmer of five-acres who ended his life last November due to mounting debts incurred on his failed cotton crop.
His accrued loans of two years amounted to Rs.3.5 lakh, and every month, he had to suffer the ignominy of the moneylenders’ visits to his home, his son G. Gangaprasad, an 18-year-old college student who now spends more time as a daily-wage worker said.
Bhojanna’s widow Indramma is helping run the house now with her meagre income as a beedi worker.
The interest rate on private loans ranges between 24 and 36 per cent, informed Rajasekhara Reddy, one of the committee members.
“The microfinance companies would collect the interest amount every month. For a farmer this is a burden as farming doesn’t guarantee regular income,” he explains.
“We had brought this to the notice of the district Collector too and submitted a memorandum. However, the Collector had approved ex-gratia for only 18 deaths he considered genuine. After we submitted our list, ex-gratia was cleared for 50 farmer families,” S. Malla Reddy, vice president, Andhra Pradesh Rythu Sangham.
BT cotton hybrids
The report further states that though on an average 1.65 lakh hectares of land is under cotton cultivation in the district, this had increased by 20 per cent in 2009. Thus a total of 1.90 lakh hectares of land was reported to be under cotton cultivation, with almost 80 per cent of it under BT cotton hybrids, it says. The drought forced the farmers to re-seed thrice for gap filling and with each bag of cotton seed costing around Rs.750, this meant an increase in cost of cultivation, explains Mr. Rajsekhara Reddy. “The minimum cost of cultivation per acre is around Rs.12,000 so a farmer would require a harvest of six quintals per acre merely to break-even,” he points out.
Despite the minimum support price for cotton in kharif 2009 standing at Rs. 3,000, the low yield – almost half of the previous year – pushed farmers deeper into debts, the report points out.
Kodanda Reddy, member, Andhra Pradesh Kisan Cell, said the district had witnessed 15 deaths in three days in November and this too was brought to the notice of Collector.
“I visited the families personally to ascertain the facts. Majority of the farmers didn’t receive crop insurance amount and there was little intervention to stop the private lenders,” he says adding the loans were also given in kind in the form of seeds and fertilizers.

The modern farmer and (un)common sense

Anil Bhattarai

FEB 22 –
In 2004, Community Managed Sustainable Agriculture (CMSA) began with all of the 200 farming families in Punukula village of Khammam District of Andhra Pradesh, India. That year, they decided to stop using pesticides and chemical fertilisers and to adopt ecological management of the soil and production process. The yields did not decline, and for the first time, farmers did not have to borrow from moneylenders to pay for their cultivation expenses. Through active involvement of small and medium farmers, these practices spread like wildfire in the subsequent years. By early 2010, the number of farmers practicing the sustainable system had grown to over 318,000, and the acreage under ecological practices had increased to 2 million acres, almost 8 percent of the net cropped area in the state. Between 2008 and 2009 alone, an additional 600,000 acres were added to chemical-free agriculture. 

In the mid-1960s, when the green revolution in agriculture was promoted in a few selected parts of India, many international agencies, the government of India, development intellectuals and agricultural experts promised nothing short of an agricultural cornucopia. They thought they had found answers to India’s agricultural problems. This dream lies in ruins now. Initial bumper crops have given way to widespread stresses. Dwindling water tables, erosion of soil fertility, permanent water logging, poisoning of water sources and pesticide poisoning of farmers and farm workers have become common. There has been a decline in the nutritional contents of food, and bio-diversity has declined precipitously. A very small section of large farmers reaped short-term benefits; but for a majority of the farmers, the green revolution technologies have been a source of multiple stresses. The agricultural gross domestic product might have grown, but the proportion of actual production from land has been on the decline in comparison to income from trade in inputs and trade in agricultural commodities. In recent years, the erratic monsoon caused by climate change has put further strain on the productive agricultural economy.

These stresses have had tragic consequences across India for farming communities. The dependence on high-input agriculture and lack of control over the pricing of their own produce meant that farmers were increasingly indebted; and most of them, to usurious local moneylenders. The debt-stress led to widespread suicides among farmers. Between 1995 and 2005, over 100,000 farmers committed suicide due to indebtedness and other farm-related stresses. States such as Andhra Pradesh, Maharashtra and Madhya Pradesh topped the list in terms of the number of farmer suicides in India.

This trend is in the process of being reversed in Andhra Pradesh, and this process of reversal is nothing less than revolutionary. What CMSA practices are generating are shifts not only in the in-farm practices, but reversing the very assumptions under which conventional agriculture practices were spread. The old green revolution projects emphasised transfer of technology developed in laboratories and the field of agricultural colleges and research centres. Farmers were considered as recipients of expert knowledge. A wide network of public extension system was created and subsidised. In the 1990s, this extension system gradually collapsed as the government withdrew funding. These roles were then taken up by the private sector without much control of the farmers. They began aggressively to sell chemicals, hybrid seeds and other inputs for the farmers. Many farmers fell prey to the lure of cash crops such as cotton.

In Andhra Pradesh, a quarter of the monetised economy is contributed by agriculture that accounts for 60 percent of the employment. During much of the last three decades, when chemical-intensive, high external input agriculture was vigorously promoted by both the government and other agencies, farmers became heavily indebted. Pesticides and chemical fertilisers accounted for around 35 percent of the total cultivation expenditure. An overwhelming 83 percent of the farmers were indebted because of money borrowed to pay for these external inputs. The private extension services are so unregulated that the consumption of pesticides in Andhra Pradesh is 0.82 kg/hectare as against the Indian national average of 0.3 kg/hectare.

Things seem to have begun to change. Farmers are becoming an active part of building institutions of learning. Those who have been involved in practicing ecological practices have become local resource persons in what has come to be known as farmers’ field schools. This is a complete reversal from the earlier approach where knowledge flowed one way from experts whose lives did not depend on farming to farmers. Massive amounts of resources were poured into designing information, education and communication (IEC) activities to get the messages across to the farmers about the benefits of chemical-based conventional agriculture.

Development of ecologically sound technologies is now occurring in the farmers’ fields under the leadership of the farmers. This is also the reason for the spread of new practices among such a large number of farming families in such a short period. Demonstrations and trials for a variety of technologies are conducted in the farmers’ fields under the leadership of the farmers as researchers.

Usually, sustainable agricultural practices are focused on fresh fruits and vegetables. These farmers in Andhra have started developing ecological practices for paddy and other grains too. Productivity has been equal to conventional agriculture with significantly reduced amounts of cultivation expenditure. As soil fertility is increasing, it will not be a surprise if the productivity of ecological farming will surpass that of chemical-based practices. A very large proportion of the farmers have stopped buying food from the market as they have been able to generate a surplus on their own farms. Because they have formed cooperatives to market their produce, they have also been able to get higher prices that would otherwise be siphoned off by middle-level traders.

In a survey carried out in five districts, 386 families out of the 467 families who had mortgaged their farm land to borrow money had been able to pay off their loans by using savings from the CMSA income. Most significantly, there has not been a single case of farmer suicide since CMSA began in those villages. There has been a noticeable drop in pesticide-related health problems, especially among women, as they were the ones who used to carry out the spraying tasks. In villages where farmers have completely stopped using chemicals, the groundwater and soil have become pesticide-free. There has been an increase in the number of birds in the village.

For a long time, revolutionaries, social scientists and modernising technocrats have been thinking that farmers were ignorant. Modern agriculture created a lure unsurpassed for a long time. The 20th century was the golden age in terms of the hegemony of conventional thinking and practices. Fossil fuels provided the needed resources for producing chemical fertilisers and pesticides. Machines made it possible to cultivate large areas of land. Most importantly, farmers had a very small role in designing the new practices. Experts in laboratories or research fields in agricultural colleges monopolised the process of knowledge generation. In the process, the age-old knowledge that farmers possessed eroded. But that approach has reached a dead end. Green revolution practices have created crises across the world. As we encounter multiple crises — both at the social and environmental levels — farmers such as these in Andhra are leading the way out of the quagmire that we have got stuck in.

Anil Bhattarai