Farmers and Loans: Denied fresh loans, debt traps await Telangana farmers

Agriculture experts feel that if the banks turn their back on farmers, they would be forced to approach private lenders which will in turn land them in a debt trap.

Hyderabad: With several banks not offering fresh loans to a large number of farmers citing various reasons, the farmers are under severe stress as they have to look towards private lenders to take up agricultural activities.

Agriculture experts feel that if the banks turn their back on farmers, they would be forced to approach private lenders which will in turn land them in a debt trap. Small farmers who approach unregistered private money lenders after they are denied loans by the banks fall into an unending debt trap. The lenders constantly harass them, issuing threats or seizing their lands, which sometimes pushes them to attempt suicide.

---

Already a farmer from Iskilla village of Ramannapet mandal of Yadadri Bhongir district died of heart attack on Friday after bank officials told him that they could not issue him a fresh loan. He collapsed in the banks while pleading with the officials to issue him a fresh loan. Another farmer from Bommanpad village of Narayanpet district collapsed while waiting in the queue in an SBI branch for a fresh loan on Saturday.

Deputy Chief Minister Mallu Bhatti Vikramarka, during the State Level Bankers Committee (SLBC), had recently urged the banks to issue fresh loans to farmers to take up agricultural activities. However, despite this, banks are not issuing fresh loans to all farmers. Complaints of banks denying fresh loans to farmers are pouring in from different parts of the State on a daily basis.

This has led to a peculiar situation in the State. Farmers who have not received the crop loan waiver are agitating on roads and in front of banks and those who received the waiver are struggling to get fresh loans.

Consortium of Indian Farmers Associations Chief Advisor Peddireddy Chengal Reddy said it was the duty of the State government to ensure that every farmer got fresh loans from banks. “Banks cannot deny loans to farmers. It is against norms and RBI guidelines. The Chief Minister should talk to banks and see that every eligible farmer gets loans. If the banks do not listen, then the State government should bring it to the notice of RBI and Finance Ministry,”he said.

If the banks do not issue fresh loans to farmers, they would be forced to approach private lenders, who would be charging high interest, putting additional burden on the farmers, he observed.

Crop loans are critical for the agrarian cycle and are used to fund the purchase of farm inputs-seeds, fertilisers, pesticides and so on- ahead of the cropping season. The government subsidizes loans to farmers, and banks are mandated to give out farm loans, however, the banks often deny loans to them on one pretext or another.

On top of this, there is no input assistance from the State government either this time, with the Rythu Bharosa scheme yet to be launched. Farmers recalled that they used to get Rythu Bandhu amount in time during the BRS regime, but ever since the Congress came to power, there was no such timely financial assistance from the government.

Situation no different in Karimnagar

Karimnagar: Though farmers who got their crop loans waived approached banks here, they are being denied fresh loans. Many of them were denied on account of the pending interest amount of the previous loans from the cut-off date announced by the government. The State government had announced to waive crop loans (up to Rs 2 lakh) taken up to December 9, 2023. According to the conditions, farmers have to pay the interest amount for the period of the remaining eight to nine months (after December 9, 2023). It is only if they clear this amount that they will be eligible for fresh loans.

Lead bank manager Anjaneyulu said farmers would have to pay the pending interest amounts if they wanted fresh loans. Fresh crop loans worth Rs 553.93 crore were sanctioned in the first quarter of this year and Rs 222.76 crore was given in July and August, according to officials. However, even as the Vanakalam season is drawing to an end, farmers trying to get loans are being denied the same with banks citing different reasons. Some farmers were also told that their age was a negative factor.

All these factors are once again pushing farmers towards private money lenders, a situation that Rythu Bandhu had done away with.