Farmers demand higher scale of finance for loans to meet actual cultivation cost

Considering the rise in cost of fertilizer, agriculture inputs and labour wages

A wide gap between the scale of finance and the actual cultivation cost has been posing a hardship to farmers. In this picture, a cane grower is seen maintaing his field in Pudukottai on Saturday.

The gap between the scale of finance and the actual expenditure for cultivating a crop has been widening for various reasons and farmers in the district have been making a pertinent plea to increase the scale of finance, taking into consideration the rise in the cost of fertilizer, agricultural inputs and above all labour wages.

One of the reasons for the difference in the bank's estimate and the farmer's actuals is, according to farmers, the bank sits upon the estimate at least six months ahead of the cropping season-well before farmer's preparation in the fields-providing adequate time for the rise in the prices of petrol, fertilizer and other inputs, says G.S. Dhanapathy, a progressive farmer.

He says that the scale of finance per acre was Rs. 21,000 for banana while a farmer had to incur an expenditure up to Rs. 38,000.

“Every plantain needed a few supporting poles to protect it from being uprooted, and the cost of these poles has been on the rise.

Further, the cost of fertilizer and urea and other complex had almost doubled - between the date when the scale of finance was decided last year and the farmer applied the fertilizer this season.

“The timing of the decision on scale of finance always precedes the cultivation season by at least six months. The hike in prices of diesel, for instance, has resulted in steep hike in cultivation cost or farm mechanisation cost,” he says.

For paddy, the scale of finance is Rs. 11,000 while the actual expenditure is Rs. 18,000. In case of farmers adopting System of Rice Intensification, the cost would come down to Rs. 14,000, thanks to some subsidy in the form of inputs.

The worst sufferers were the sugarcane growers. Primarily, dual scale of finance was being followed for sugarcane crop - Rs. 31,000 for the cane growers registered with the cooperative sugar mills and Rs.28,000 for those registered with private sugar mills. “Every sugarcane grower had to incur about Rs. 40,000 an acre to raise the crop,” he said. Cooperative bank officials say that the scale of finance was being decided at the state level meeting being held in Chennai every year.

This year, the meeting would be held shortly for deciding some hike. However, the new scale of finance would be sanctioned only for the crop season next year.