Punjab farmer at Arhtiya's mercy

Not state agencies, private moneylenders lead to top status in rural indebtedness, writes Amrita Chaudhry in The Indian Express

Not state agencies, it is the commission agent, the arhtiya, who is the biggest debt-giver in the state. So, even though Chief Minister Amarinder Singh has hinted at waiving the loans taken from state agencies, that amount accounts for a fraction of the total rural debt. That sums up the tragedy of the Punjab farmer today. For a breed that once considered debt as an anathema, they now lead the country in rural indebtedness; indeed, the total annual rural debt of the state, Rs 24,000 crore in 2003-04, is more than its gross annual earnings from agriculture. According to a recent report of the National Sample Survey Organisation (NSSO), each Punjab farmer has a debt of Rs 41,576, against the national average of Rs 12,505. The rising cost of inputs, combined with the almost-static minimum support price (MSP), is popularly held responsible for the ever-increasing debt burden. Giving an insight into the state of affairs at Ground Zero, Malkit Singh, a farmer who owns four acres at Lehal Kalan village in Sangrur district, says the entire village economy hinges on the parchhis started by the arhtiya. "Be it a loan for pesticides, seeds or even clothes, my arhtiya, instead of giving me money, hands me a chit with which I can buy the stuff from a shop owned by him or his friends," he says. "It's the arhtiya who handles our debt records, we simply continue selling our crop to him. And the interest rates can even touch 24 per cent." The vicious cycle often ends in death, says Inderjeet Singh Jaijee, who heads a group called Movement Against State Repression (MASR). "The only reason suicides are not catching the media eye is because of the stigma attached to the s-word in the state. No self-respecting family will ever own up to one of its members taking his own life," he says. But MASR workers claim to have uncovered 750 suicides in two blocks of Sangrur district alone since 1988. Jaijee is now fighting a battle in the High Court to get compensation for the victims' families, on the lines of Andhra Pradesh. On another front, the Punjab Farmers' Commission has approached the Punjab Agricultural University to conduct a study on the issue. Dr P S Rangi, advisor, Farmers Commission, says: "We plan to study the requirement, availability and the utilisation of credit by the farming sector." The Punjab Human Development Report, 2004, prepared under the aegis of UNDP, attributes the rise in farm debt to the squeeze in profit. Dr H S Shergill, a well-known economist from Panjab University, Chandigarh, who was the first person to give a figure to this indebtedness, says: "The cost of inputs has almost doubled in the past two years, but the MSP hasn't changed much in four years." The farmers are also being accused of trying to keep up with the Joneses by taking unproductive loans for marriage celebrations, house, et al. With most experts still grappling with the volume of the debt, there are few solutions in sight. Dr Sucha Singh Gill, a reputed economist from Punjabi University, underlines the need to spruce up the government agencies doling out credit to save farmers from being exploited by commission agents. "The state government should declare loans given by the private money lenders null and void," Gill says, adding that at least 12 per cent of the farmers were in no position to repay their loans even if they sold off their land.