Notice to repay loans:
Last night Dnyaneshwar had informed me about how almost 30 farmers in the villages were sent notices to repay the outsanding loans with interest. These notices were sent by the District Cooperative Bank, Osmanabad. The notice also mentioned about how the banks would name and shame the farmers if they fail to repay the loans by mid December.
An excerpt from the notice reads “You are a respectable member of the society and you have an overdue loan since 25/1/2000 with the Y. V. K. Seva Society which is a partner of Bharola (not sure of this name). Because of your overdue loan, the bank is facing a cash crunch and the bank cannot conduct its operations effectively.
The bank’s management committee, senior officers and employee association have decided to use Gandhigiri to try and recover the loans. For this, the bank has decided to do one of the following:
- Put up a tent opposite your house to protest
- Make use of a band
- Ring bells
Due to these actions, your standing and image in society is likely to be in danger. Therefore, to avoid such a situation, you should immediately repay your overdue loans with interest in the concerned bank within 30 days and take a receipt for such payment. Else, the recovery team will take action as explained above.”
The banks were restricted from collecting any loan repayments for the past 4 years due to the prevailing drought in the region. However, due to some late seasonal rains this year in August/Sep, this restriction was relaxed. The farmers were just beginning to reap the benefits of the rains and preparing for the next season, when the crisis of demonetization hit them out of no where. They were caught completely off guard, unprepared and very under prepared.
November is an important month for the farming community – it is the Rabi season and typically the farmers in the region prepare for sowing jowar, wheat, sunflower and chana. Reeling already under the current cash (less) crisis, the farmers caught a temporary relief when the govt. announced that the old denominations be allowed to transact seeds.
Bhola (changed name), another farmer i spoke to said how his loan of 2 lakhs taken sometime in 2000 is now up to 6 lakhs. He further argued how the bank can charge him more interest when the interest is equal to the principal. Bhola is not wrong, well at least up until 1993 that was what the banks were told to do. Subsequently this was no longer the cause (there is a case pending in supreme court regarding this). Also when a farmer takes a loan with the bank, the banks are supposed to also pay the premium for the crop insurance. The farmers informed me that the cooperative bank never paid the premium for the insurance.
How do I know Dnyaneshwar?
I had been working (so far gave 1.6 lakhs as loan) with Dnyaneshwar (and his team), farmer from Nagur village in the Osmanabad district on a project to help produce and sell organic manure locally to the farmers in the village. He was introduced to me by another friend Prateek.
Using organic fertilizers will also help in (1) retaining more moisture in the soil, so that less water is needed for farming, (2) improving soil texture, (3) nurturing soil microbes that help make soil nutrients available to plants, . Further, there are 500 shareholders (all farmers) from 8 villages, including Nagur, in the company, and the profits will be distributed equally among the shareholders.
The hope is to reduce the number of farmer suicides in their village, and in nearby villages, by improving the income of the farmers.
What about Osmanabad?
Osmanabad district in South-East Maharashtra has been suffering from severe drought for the past 4 years. Government records say that more than 1000 farmers have committed suicide in this situation. However, the actual numbers are much higher, since this number does not include farmers who
- took loans from unregistered money-lenders
- do not have their own land
- who did not write suicide note (many are illiterate)