Even as farmer suicides in Odisha has gone endemic, the farmers are poised for more suicides as in near future they may not get much institutional loan and have to fall back on the moneylenders.
The warning shot for the clueless State Government is with around half of the loaned amount by institutional lenders in State turning overdue and around one-fifth of them turning Non-Performing Assets (NPA), banks look hesitant in lending loans to farmers in the coming Rabi season, especially after the evolving post drought scenario where the insolvency of farmers stands accentuated. And, the drought package announced by the State Government has no proposals to assuage the debt-ridden farmers. Result: Suicides may continue unabated.
Consider the evolving crisis. Farmers in Odisha took loans for growing crops and also for augmenting irrigation facilities-cum-farm mechanisation. A snapshot on the bank lending to farmers as crop loans and agri-term loans till the first quarter of current fiscal year reveals the enormity. While over 55 per cent of crop loans taken by farmers in the State are overdue, a high of 11.5 per cent of that have already turned NPA.
Similarly, a whopping 47 per cent of agriculture term-loans taken by farmers for sprucing up irrigation facilities or for farm mechanisation are overdue and a massive nearly 21 per cent of that has turned NPA by the end of first quarter of 2015-16. The evolving crisis could well be ascertained from the fact that when the overall NPA in Odisha is 8.6 per cent and overdue amount percentage is only 46 per cent, the indices for the farm sector as a whole is 13 per cent and 55 per cent respectively.
“The figures are dreadful for the banking sector as the NPA level and overdue proportion are at an unsustainable level. This would have impact on further credit flow to the sector. We have conveyed about our stressed farm portfolio to State Finance Minister Pradeep Amat,” said a senior SBI executive.
Incidentally, the SBI owns almost half of the farm NPA burden and overdue amount accruing to the public sector banks in State. Recently, an already debt-ridden farmer in Bargarh committed suicide as he was unable to provide irrigation facility for his land following deficient rainfall. Farmers take agriculture term loans to augment irrigation facility.
Moreover, cooperative societies/banks, which lend maximum crop loans (meant to meet expenses for growing crops) to farmers, are saddled with a NPA level of over 10 per cent and overdue loan proportion at a whopping 56 per cent. Significantly, around two-fifth of farmers who have committed suicide in last 40 days have borrowed from cooperative societies.
Since the drought package offered by the State Government has no deal for farmers on farm credit, distressed farmers still calling it quits from life.
According to Indian Council for Research on International Economic Relations (ICRIER) 2015 report, in such widespread distress-time, the Government should consider a targeted debt-waiver scheme for farmers. It calls for a debt-waiver for calamity struck farmers on individual merit and not a generalised debt-waiver of 2008 type.