Poor Odisha farmers face worst financial exclusion in country!

With farm sector NPAs posting 3rd highest rise in Odisha in 2017-18, RBI report underlines agri-distress in State. Odisha farmers find it very hard to avail consumer loans from banks. The credit hardly meet farmers' input needs

Bhubaneswar: Even as the State Government goes gaga over KALIA (Krushak Assistance for Livelihood  & Income Augmentation) scheme, the reality is hard to digest – farmers in Odisha can’t avail farm credit to meet their input requirements like seed, fertiliser, pesticides, insecticides, irrigation charges and electricity.

The Reserve Bank of India’s (RBI) report of the Internal Working Group (IWG) to review Agricultural Credit across the states, including Odisha, has put the glare on why farmers in Odisha approach private money lenders and why the farm suicides continue in the State.

Significantly, reports of around 8 farmer suicides in the State over alleged crop loss due to drought/flood had been reported in the last two months (July – August) this year.

As per the RBI report, Odisha has been ranked in the bottom six-states among 23 states nationally in the indicator of farm credit requirement and sanctioned. It said Odisha farmers could avail only around 40 per cent of their input requirements from the institutional (nationalised banks & State cooperative banks) farm credit sanctioned.

The RBI report rated the farm credit intensity in Odisha as poor as the State could score a value of 0.18 in the indicator of proportion of farm loan to the gross value output in crop farming. The national average score has been 0.32.

Moreover, the IWG finds Odisha among the ten poor performing states in delivering farm credit to farmers as the State’s outstanding agri-credit has been mere around 35 per cent of Odisha’s agri GDP.

Another significant mismatch pointed out by the IWG is, in Odisha, the percentage share of loan accounts of small/marginal farmers didn’t tally with the percentage share in amount outstanding to the small/marginal farmers.

Terming Odisha’s case as an acute case of financial exclusion of poor farmers, the report rued that presence of a large number of small and marginal farmers in the state has not translated into proportionate number of loan accounts. It said, “While the share of small/marginal farmers in the loan accounts has been around 2 per cent of total loan accounts, the outstanding amount proportion was mere 1 per cent only.”

RBI report explains that this shows the amount of loan per account of small or marginal farmers in the State is abysmally poor. Odisha accounts for 4 per cent of country’s small/marginal farmers in  the country, reveals the Census 2011 data.

Another dark spot is the State fared as the 2nd poorest in the country where KCC (Kisan Credit Card) is not a preferred credit instrument for disbursing crop loans.

What is the benefit of KCC? Farmers also take loan for consumption. But banks are reluctant to oblige to their consumption loan needs. However, if KCC has been the credit instrument of farmers in Odisha, the farmers could avail 10 per of their credit requirement for consumption needs.

Above all, agrarian distress in Odisha has been observed by RBI’s IWG report as the NPA (non performing assets) of farm loans in Odisha in the year 2017-18 had posted the 3rd highest growth in the country.