"A deadlock." That is how the bank officials in Maharashtra's Nanded district describe the past two years.
"The farmers are neither repaying old loans, nor can they apply for new ones," they said. "Lack of (transactional) activities have put the banks under tremendous financial pressure."
When did the deadlock begin? The officials are quite prompt in blaming it on Maharashtra government's announcement of waiving of farm loans. They don't hold back their punches in scathingly criticising the Devendra Fadnavis-led Maharashtra government over the shoddy enforcement of the farm loan waiver " as long as the recorder is off. "The elections are only a week away," they say, and add, "Don't quote us."
In June 2017, Fadnavis announced the "biggest ever" farm loan waiver of Rs 34,000 crore. The initial draft of the loan waiver had so many caveats; it ended up marginalising farmers who needed it the most. It riled up farm activists, which led to severe agitations. Fadnavis gradually withdrew some of the conditions one after another, but it prolonged the implementation of the waiver. It meant the banks could not give further loans to farmers until the existing ones were cleared. Over two years on, the enforcement continues, disadvantaging farmers, as well as the financial institutions.
Nanded District Cooperative Bank (NDCB) and State Bank of India (SBI) are two of the major sources of credit for farmers in the district. A senior SBI official, requesting anonymity, said if they issued 100 Kisan Credit Cards at a branch before June 2017, it has gone down to 8 or 10 since then. "The queue outside the bank used to be huge," he said, and added, "Agriculture finances have been stalled, and our Non-Performing Assets are increasing."
The trouble is that no one knows how long this charade will continue. "Farmers ask us questions regarding their loan waiver. We don't know what to tell them," the official added.
The banks receive a list from the state government, indicating the accounts eligible for the loan waiver, along with the amount corresponding to the accounts. Once the banks receive the amount from the government, they proceed to waive off the concerned farm loans.
According to bank officials in Nanded, the Maharashtra government succumbed to pressure after the farm protests. But the waiver, in fact, worsened the agrarian credit crisis, they said. Getty Images
Since the announcement of the waiver in June 2017, the SBI branch, this reporter visited, has received only 15 lists, and the official had no clue how many more are in the offing. The NDCB has received 23 lists so far. It had sent information of about 71,000 farmers to the state. Over two years later, just above 40,000 farmers have received the waiver. "Why announce a waiver if you are not prepared to enforce it?" a bank official asked. "The government succumbed to pressure after the farm protests. But the waiver, in fact, worsened the agrarian credit crisis," he further added.
The financial year of 2017-18 clocked a minus 50 percent of year-on-year growth in terms of agriculture credit disbursement, according to the May 2018 report of State Level Bankers' Committee (SLBC). The following year too the crop loan disbursement was inadequate.
Probably noticing the burgeoning credit crisis in the state in May 2019, Fadnavis sanctioned a Rs 87,000 crore credit plan for agriculture. He urged the banks to give maximum loans to farmers by being sensitive in order to achieve the target. But only 45 percent of the targeted crop loan disbursement in Maharashtra is achieved for the Kharif season by 15 September, 2019.
In Nanded, the targeted crop loan disbursement was just over Rs 2,000 crore for the Kharif season. The disbursement, however, is at a measly 26 percent. In the agrarian region of Marathwada, the number stands at 31 percent. Nanded comes under this region. "The state can set a target," said the SBI bank official. "But we cannot achieve it if their decisions are going to hamper our functioning."
The virtual non-delivery of farm loan waiver, and the repercussions that followed, will play a crucial role when Maharashtra goes to polls on 21 October, believes former Chief Minister of Maharashtra, and a prominent Congress leader from Nanded, Ashok Chavan. "Farmers feel deceived," he said. "We have told farmers that if we come back to power in the state, we will deliver the remaining loan waiver."
Nanded, once a predominant exporter of bananas and home to 12 sugarcane factories, has lost its sheen in the past two decades or so. The district has not had much progress as far as irrigation is concerned, and the changing weather pattern has exposed state machinery's lack of preparedness. Five sugarcane factories have shut and banana farmers are struggling for survival " much like Chavan himself.
After a shocking defeat in the recently-concluded Lok Sabha elections, Chavan's political future is at stake in the 21 October polls. The Vanchit Bahujan Aghadi had bagged over 1.5 lakh votes in the elections, while he lost to the BJP by about 30,000 votes. His supporters blame the VBA for his loss, but poll pundits believe he had taken the district for granted " he would hardly be seen among the electorate " and he paid the price for it.
"We had lost connect with people in the 18-35 age group for several reasons," he said, and added, "We have re-established that youth connect in the past five months." Contesting from one of the nine constituencies in Nanded, Chavan said the BJP is campaigning on Article 370 to divert attention from the main issues. "We hope people understand this," he said. "We are fighting for their cause."
While Chavan is likely to get past the line, the Opposition, currently holding five out of nine seats in Nanded, will, however, find it difficult to retain their seats. It has been a bit of a slide, for in 2009 they had won all the nine Assembly constituencies.
On the ground, there is an inevitability to Fadnavis' re-election. The general sense among voters is that if the local MLA belongs to the ruling party, the constituency has a better chance of being developed. The BJP cadres campaigning on the ground, buyoed by the party's penetrative social media campaign, has convinced people of this theory. Sitting under a tree, haplessly looking at the sky, farmers say the representative of the constituency should get along with the chief minister to get work done. When asked if they got the loan waiver or crop loans for the season, they expressed their disillusionment with the Fadnavis government.
Agriculture credit has been a problem in Maharashtra for more than a decade. However, it has worsened under Fadnavis. Pasha Patel, a senior farm leader and chairman of Maharashtra Commission for Agricultural Costs and Prices, said the District Cooperative Banks are struggling financially, and nationalised banks are not keen on distributing credit to farmers, for it is a loss-making profession. "Banks do not treat farmers well," he said.
However, the District Cooperative Banks are struggling because of widespread corruption and their inability to take on influential wilful defaulters. The NDCB's NPA currently stands at over Rs 200 crore, out of which Rs 40 crore belongs to agriculture. The majority of it is due to sugar factories, cotton mills and so on. To make matters worse, the delayed enforcement of farm loan waiver has further worsened their situation.
Farmers, when asked whether they applied for a crop loan this season, say they are waiting to hear from the banks about their previous waivers. The banks, however, are waiting to hear from the state. In other words, it is a deadlock.