‘Tiny farmers don’t get government credit’

Andhra (including Telengana) farmers have had the highest rate of suicides within the country for quite some decades.

Government’s credit for agriculture sector is not reaching the tiny and small farmers, and, as a result of which, they are caught in a debt trap, claimed an Assocham study.

Describing the plight of small farmers as “alarming”, it stated that over two/thirds of farm land holders had less than one hectare and the agricultural credit that the government had provided for hardly went to them. For small landholders, the source of farm credit was still the traditional moneylenders despite the active presence of banks and co-operative credit institutions. Their debts carried high interest rates, and in many cases as much as 25 per cent or more. “The debt burden is far higher than what their asset value could hold,” it added.

It has also found that there was huge vulnerability of farming households in Andhra Pradesh to indebtedness as compared to other states.

Some states are better

Only four States — Gujarat, Kerala, Punjab and Haryana — had average asset value far higher than the national average of that value.

Assocham has come up with the idea of promoting corporate and co-operative farming for these tiny holdings after consolidation to enable them access institutional credit. Such collective approach alone would enable them gain greater access to institutional credit and command the services of agricultural experts and financing institutions.