At ₹2.52L per Farmer, Loan Burden Highest in Panjab

At a loan of ₹2.52 lakh per operative Kisan Credit Card (KCC), Panjab tops India in per farmer outstanding loans. Panjab’s debt burden is ₹55,428 crores to around ₹21.98 lakh agricultural families, surpassing the national average of ₹1.20 lakh per KCC holder. The KCC, introduced in 1998, facilitates farmers to purchase agricultural inputs and draw cash for their production needs. This loan burden excludes institutional loans by banks and non-institutional loans by commission agents. A study last year showed Panjab farmer’s borrowing is the highest in India. The study revealed a marginal farmer in Panjab borrows ₹3.4 lakh annually, as compared to ₹84,000 and ₹62,000 in Uttar Pradesh and Maharashtra, respectively. More than 40% of the surveyed farmers had never received any farm loan waiver. The agrarian distress is real and the question is how the state deals with the issues. Recently, Panjab farmers protested over sugarcane prices and have not accepted the new price offered by the government (SDW Vol. 1 Issue 11 Update). A stark example is how in Panjab CM Mann’s constituency Dhuri, the Bhagwanpura sugar mill – that began operations in the early 1950s – is shutting down. Kunal Yadav acquired the mill in 2005 and announced its closure on 27 Oct this year as it was running into more than ₹100 crore losses. The reasons: lack of support by the state government and inadequate raw materials. Until 2017-18, nearly 20,000 acres in the area were under sugarcane cultivation. Payment problems led farmers to reduce the area and the raw produce to the mill.