Bengaluru: Naveen Kumar, 40, a small farmer in Hassan district, Karnataka, paid Rs2,400 as premium (Rs1,200 per acre) to insure his jowar crop last year.
The crop failed after deficient rains. But Kumar was covered—or so he thought. Earlier this year, he received Rs1,600 (Rs800 per acre) as compensation—33% less than what he paid in premium. He does not know the actual insurance amount.
“No farmer here knows the real reason. Local officials and the bank are also clueless. We got less than what we paid as premium,” Kumar said. He is among the state’s 7.5 million farmers now banking on a farm loan waiver announced by the state on Wednesday.
The Siddaramaiah government has increased the compensation for families of indebted farmers who committed suicide from Rs1 lakh to Rs5 lakh
The government has agreed to waive crop loans worth Rs8,165 crore or up to Rs50,000 per farmer borrowed from cooperative banks. Cooperative banks have disbursed Rs10,736 crore while nationalized and commercial banks have lent over Rs42,000 crore. The waiver will benefit over 2.2 million of the state’s farmers.
The government says in order to help the rest, it needs support from the Central government, which has flatly refused to back farm loan waivers.
Earlier, Congress vice-president Rahul Gandhi’s visit to Mandsaur in Madhya Pradesh where six people in a farmers’ agitation died in police firing and subsequent demands to waive farm loans in that state had irked farmers in Karnataka. “If he can demand this in MP, can’t he instruct the same to Congress-ruled Karnataka,” Kodihalli Chandrashekar, president of the Karnataka Rajya Raitha Sangha (state farmers’ association) said.
Many farmers who heeded government advice last year not to go in for sowing are yet to hear any word on compensation even though opposition parties have demanded an amount of Rs25,000 per acre. The government has said it has distributed a total of Rs1,459 crore as compensation to 2.19 million farmers, and that more will follow. But with the sowing season already underway, farmers who have defaulted on their repayments are finding it hard to get access to credit.
Naveen Kumar’s loan of Rs80,000, taken five years ago, has accumulated interest, forcing him and many like him into extortionate moneylenders who sometimes charge even by the hour.
The Siddaramaiah government has increased the compensation for families of indebted farmers who committed suicide from Rs1 lakh to Rs5 lakh, among other measures which include pension of Rs2,000 to the widow and varying amounts payable to death of uninsured cattle and livestock.
The state government has an interest subsidy scheme in place that amounts to about Rs800 crore per year and market interventions measures like bonus payout of Rs450 per quintal in addition to minimum support price of Rs5,050 to procure tur.
Technological interventions like e-trading are yet to make much impact in the state, farmers and traders say. Figures from the Rashtriya e-market Services Pvt. Ltd (ReMS)—a joint venture between Karnataka government and NCDEX Spot Exchange Ltd—show that the modal prices—highest frequency number—for 20 major commodities have shown an average rise of 15-45% since the introduction of e-trading in 2015.
E-trading is available in all 157 major markets across 29 districts and claim to have traded over 298 lakh tonnes of produce valued at Rs56,696 crore in the last three years.
To read more Fractured Farms stories, click here.
Manoj Rajan, chief executive and managing director of ReMS says since the start of e-trading, pulses have shown more than 9-14% increase in farmers’ share of the consumer’s rupee and 7-11% in the case of dry chilli, groundnut, tamarind and paddy commodities.
Not all farmers agree.
“E-trading has been nothing more than a presentation,” Ramesh Chandra Lahoti, president of the Bengaluru Wholesale Foodgrains & Pulses Merchants Association said, adding many farmers continue to trade outside the UMP and in cash as the platform is controlled by commission agents and traders.
Chandrashekar says loan waiver demands and announcements will be to embellish political gains and not for farmers well-being.
SUBSCRIBE TO OUR NEWSLETTER »
Meanwhile, little progress has been made to increase irrigation cover from around 30% currently, while legal entanglements over the use of Cauvery and Mahadayi river waters have compounded the problem.
Farmers want to get back to sowing. But seeds cost more. “Last year, I could buy 20 quintals (or 100 kg) of potato seeds, this year it’s down to 5 quintals,” Kumar says, adding potato seed prices are up from Rs1,600 per quintal last year to Rs2,400 this year.