Gujarat: Farmers' bad loans rise 3.75 times in just four years

  • | Saturday | 23rd March, 2019

Bad loans of farmers in Gujarat have almost quadrupled in four years, according to a recent banking report. Steps such as depositing Rs 2,000 in bank accounts of farmers will not improve farmers' incomes. If steps are not taken to improve farmers' incomes, cases of suicides will rise drastically or they will turn violent," said Sagar Rabari, founder president of Gujarat Khedut Ekta Samiti. They say this is proof that farmers' income has fallen to the extent that they are unable to repay their loans. Farmers' representatives and experts say that the statistics depict the distress experienced by farmers.

Bad loans of farmers in Gujarat have almost quadrupled in four years, according to a recent banking report. Farmers' representatives and experts say that the statistics depict the distress experienced by farmers. They say this is proof that farmers' income has fallen to the extent that they are unable to repay their loans. According to the report of State Level Bankers Committee (SLBC) for the October – December quarter of the financial year 2018-19, total bad loans measured in terms of gross Non Performing Assets (NPA) stood at Rs 5,536 crore, up from Rs 1,474 crore recorded in the corresponding quarter in fiscal 2014-15. NPA for crop loan, or loans to meet the day to day requirements – such as expenses of seeds, fertilisers, pesticides – has risen from Rs 528 crore to Rs 2,156 crore and NPA for term loan – used to buy tractors and create assets for farmers — stands at Rs 3,380 crore against Rs 946 crore witnessed in the corresponding quarter in 2014-15. "The figures of NPA correctly reflect farmers' distress. If steps are not taken to improve farmers' incomes, cases of suicides will rise drastically or they will turn violent," said Sagar Rabari, founder president of Gujarat Khedut Ekta Samiti. He attributes the trend to the twin effect of rising input costs and stagnating or falling incomes. "When farmers were getting Rs 1,300 – 1,400 per 20 kg of cotton, their input costs were to the tune of Rs 500-600 per 20 kg. Now farmers are getting about Rs 1,000 per 20 kg and their cost is also close to their selling price. They are barely able to recover their cost. Under such circumstances, it is obvious that they are not able to repay loans and consequently, NPA is rising," said Rabari. Economist Hemantkumar Shah said that the present scenario makes a case to waive off farm loans, which have turned bad and at the same time, efforts should be made to increase the income of farmers, which is not happening. "If the state government decides to waive off farm loans, it is not more than three per cent of the state budget. Steps such as depositing Rs 2,000 in bank accounts of farmers will not improve farmers' incomes. This is not a sustainable solution," said Shah. Rabari said that indiscriminate import of food products and reduction in exports have also reduced farmers' earnings.

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