Farmers misuse 'late loans'

farmers thronged the bank at Indravelli for crop loans 

A majority of the farmers misuse the amount of ‘late loaning’ they take from the banks as a crop loan, usually granted in the month of July or August for Agricultural purposes.

Farmers throng to banks at a time when all the major agriculture operations are over except weeding- and are then found using the money for distinctly for non- agriculture purposes, such as alcohol consumption, celebrating seasonal festivals and visiting temples.      

They also use the money to repay the high interest they owe moneylenders who brokered the crop loan for them from the banks and who also gave them the money  to clear the pending crop loan.

Farmers generally take a loan from moneylenders and middlemen to purchase seeds, fertilizers and pesticides in May month itself since most banks don’t start giving crop loans in May. It is thus a nexus between private moneylenders and intermediaries and bank mangers.

After purchasing the seeds and other requirements , the farmers first approach the money leaders for the money to clear the pending bank loan so that they can apply for fresh loans from the bank. The moneylenders charge 2-5 percent interest for 15 days to a one- month period.

The farmers clear the pending crop loan amount and take a fresh loan and repay the loan and interest to the moneylender: the amount that remains is used for the celebrating festivals, such as Bonalu and pochamma.

A farmer Pothi Reddy of Kuchulapur village in Boath mandal said farmers who take crop loan in July or August use only 20-30 percent amount of it for agriculture while misusing the main part of it becoming indebted to private money-lenders and banks.

He pointed out that bankers usually delayed disbursing fresh crop loan once the farmer had cleared the pending crop loan with his money but they will give crop loan amount immediately if you go along with a middleman or broker and money lender.

According to sources, all the bank put together have so far disbursed Rs 1,000 crore to 1.30 lakh farmers out of  Rs 3,252 crore credit planned for the 2016-17 while the bankers achieved only 74 percent of their credit plan by disbursing Rs 2,151 crore to 3.46 lakh farmers out of total credit of Rs 2,907 crore for the year 2015-16.