Crop loan waiver spotlights skewed distribution of benefit

The Tamil Nadu government’s crop loan waiver scheme has again spotlighted how skewed the distribution of benefits is.

Farmers in Salem, Tiruchi and Erode constitute a substantial chunk of the beneficiaries. Around 31% of the total outstanding loan amount waived — ₹3,727.72 crore out of ₹12,110.75 crore — is from these regions. Again, in terms of beneficiaries, those in these regions — 4,28,138 — account for 26% of the total of 16,43,347 farmers.

This has evoked a strong reaction from some agriculturists. P.R. Pandian, a Mannargudi-based farmer-leader, contended that despite holding the pre-eminent position in agriculture, the Cauvery delta districts had been given a “raw deal”. The total amount of the loans waived in the revenue districts of Thanjavur, Thiruvarur, Nagapattinam and Mayiladuthurai is around ₹1,133 crore. K. N. Nehru, a senior leader of the DMK, who hails from Tiruchi, suspected that even at the time of loan disbursal this year, sections of the beneficiaries in the regions had sensed the formulation of such a scheme.

However, senior officials dismissed these contentions. As for the three regions cornering a substantial chunk of the loan amount waived, they said that even under the loan waiver schemes of 2006 and 2016, the share of these regions was similar to the present one. Explaining the organisational structure of the cooperative institutions, they said Central Cooperative Banks (CCBs), whose functional jurisdiction includes Primary Agricultural Cooperative Credit Societies (PACCSs), cover more than one district. For example, the Salem CCB takes care of a part of Namakkal too. Likewise, Erode covers Tiruppur and another part of Namakkal. It is not correct to assume that one district has got more than others, going by the figures of the CCBs.

Another factor is the area of operation handled by the CCBs. Thirdly, the economic strength of the PACCSs also matters. If some societies are profitable, they will have more resources at their disposal than others, and they will be lending more funds than the sick societies. This is, in turn, governed by the ability of loanees to repay.

Farmers in the western belt are generally known to be prompt in repayment, the officials pointed out.

This time, the crop loans were extended through Kisan Credit Cards, requiring the production of all essential land documents. Around 1.38 lakh more farmers were covered in January this year than the number of farmers covered in the same month last year.

Though a portion of the total loans waived pertains to “agricultural jewel loans”, this has been done in respect of the first-time borrowers. As a matter of caution, jewels have been regarded as collateral security, apart from the land documents. Of the overall amount, around ₹9,700 crore was disbursed this financial year, the officials say.

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