Pride in tractor ownership driving farmers in rural areas into debt trap?

Sugarcane Cultivators’ Association to launch awareness drive about benefits of renting farm machinery

Mahesh, a farmer from Kothegala village in T. Narsipur taluk, got the shock of his life when he received a notice from the Calcutta High Court for defaulting on tractor loan. The loan was taken two years ago and Mahesh, who has about five acres of land, had defaulted on repayment.

An arrest warrant was issued to him by the court as the company, which extended the loan, had its headquarters in Kolkata and had filed a case. Following the intervention of the local farmers association, which contacted the company, efforts were being made for an out-of-court settlement.

“Imagine a farmer in Kothegala fighting a case in Kolkata,” said Kurubur Shanthakumar, president of Sugarcane Cultivators’ Association that intervened to get the case rescinded.

More bizarre is the case with respect to Nagendra, a landless farmer in Ambale village of Nanjangud taluk. A suave salesman induced him to buy a tractor on the grounds that he would be eligible for government subsidy. Nagendra, who pondered over the offer, gave in imagining that he could rent the tractor and make a decent income out of it. A few months later, he defaulted on the EMI and the private financiers were at his doorsteps pressurising him to repay the pending amount.

This led the farmers of the region to stage a protest and a counter complaint was registered against the private financiers on charges of harassing farmers. Though Nagendra asked the financiers to take away the tractor, the latter insist on repayment of loan and threatened to drag him to court.

Such incidents are not new. But, in recent times, more farmers are opting to buy tractors without considering the economic implications and falling into the debt trap.

Besides, there is also a false sense of pride that is associated with owning a tractor among people in rural hinterland, as a result of which many of them fall prey to the tractor loan schemes, Mr. Shanthakumar added.

“This is mostly an issue with private financiers as public sector banks release loans based on the extent of land held. It is minimum of five acres in case of wet land and 10 acres in case of dry land,” according to a senior official in one of the banks. Tractors are financially viable in case of large landholdings but most farmers own about 2 to 3 acres of land and hence, it is not economically viable.

At a time when the agricultural sector is in crisis and income from farming activity is on the decline, farmers continue to fall prey to smooth and glib talking salesmen who are selling them tractors. So much so that a small village with about 100 families in Kurubur has nearly 35 tractors and this is widely prevalent in rural areas, said Mr. Shanthakumar. Hence, the association plans to caution and launch an awareness drive about the cost-economic benefits of renting agricultural machinery, including tractors, rather than outright purchase.

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Printable version | Apr 10, 2020 8:11:42 AM | https://www.thehindu.com/news/national/karnataka/pride-in-tractor-ownership-driving-farmers-in-rural-areas-into-debt-trap/article30924753.ece

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