Farmers with the smallest land holdings and landless agricultural labourers who need financial support do not have access to formal sources of credit and do not benefit from loan waivers.
Devendra Sharma, 52, suffers from an acute respiratory disorder. He is now required to put in four hours of hard labour every day on his farm, all by himself. His only son, Sunil, 27, who used to assist him, is no longer available to work on the farm. Sunil has to attend to his mother, Sunita, 47, who has recently been diagnosed with stage three stomach cancer. “According to the doctor, she has a 50% chance of survival,” Devendra said when I met him recently at his home in Ladpura village in western Uttar Pradesh’s Hapur district. “If we are able to arrange finances for her treatment, that is,” he added in a whisper, probably meant more for himself than for me.
It had been 20 days since Sunita had been diagnosed with cancer and the family had already spent Rs 65,000 on medicines, doctor’s fees, tests and the daily 40-kilometre commute to Meerut – the nearest town with decent medical facilities. Devendra, who already has a Rs 5.5 lakh debt, had to take another loan of Rs 50,000 at an exorbitant 36% annual interest rate from a local sahukar. “My relatives and neighbours helped out with some of the finances but we were still short and had to borrow from the sahukar,” he said.
Sunita’s condition deteriorated rapidly and the doctors in Meerut referred her to the All India Institute of Medical Sciences (AIIMS) in Delhi. “Doctors at the Lala Lajpat Rai Medical College in Meerut were unable to figure out how to treat her. She got progressively worse each day and lost 7-8 kgs in 10 days”, Sunil said.
Doctors at AIIMS advised that she be hospitalised immediately in the chemotherapy department as her condition was serious. “But there were no beds available so she has had to travel to and from Delhi everyday for the last five days and will continue to do so till a bed is available,” Devendra said.
Delhi is 110 kilometres from Ladpura and the despicable condition of the public transport available to get to the capital makes it a difficult option for patients like Sunita. So the family has to arrange for a private taxi that costs Rs 3,000 for one to-and-fro journey. “I go with her everyday in a taxi. I don’t know how long we will have to do this. I hope she gets a bed soon and chemotherapy can start,” Sunil said.
The problems will not end there for the family. “The treatment is going to cost at least Rs 5 lakh. I don’t have a single rupee on me, plus I have Rs 5.5 lakh in debt. We are already spending around Rs 7000-8000 daily on her treatment,” said Devendra.
“You will probably have to sell your land,” a neighbour who had walked in said to Devendra.
Devendra corrected him, “No, not probably. I will definitely have to sell off my land.”
Devendra owns two acres of land and falls under the marginal farmer category. In other words, he is part of the category of farmers with not enough land to make a profit from agriculture, as discussed in an earlier part of this series. Already suffering from the systemic nature of unviable agriculture for small and marginal farmers, his wife’s medical ailment has pushed Devendra and his family to the brink of poverty, if not beyond.
Sudhir Panwar, a professor at Lucknow University, president of the farmer organisation Kisan Jagriti Manch and a former member of the State Price Fixation Committee for sugarcane, believes that even costs other than agriculture have risen significantly for the farmer – a fact that is often not a part of discussions around farmer distress. “You see how the government has slowly withdrawn from sectors such as health care and how private health care has completely taken over. The result is that cost of health care has increased substantially for the farmers. There is the issue of deteriorating condition of government hospitals, which has not been addressed by successive governments,” he said.
According to T. Haque, an agricultural economist, the rising costs of healthcare and education further add stress to the stagnant incomes from the farm. “On one hand, government provision of basic services such as education, health care and transportation has reduced over the years. And on the other hand, incomes from the farm have not gone up. The result is that the disposable income available to farmers has reduced drastically, and continues to reduce,” he said.
“Farmers get stuck in this vicious cycle of debt where they have to keep borrowing each year, without the capacity to repay their debt. They eventually end up losing their land,” Haque said.
Three years ago, Sanjeev Tomar, 45, in Nanglamal village, about 30 km from Ladpura, was faced with a situation similar to Devendra’s. His wife was diagnosed with cancer and he was forced to sell his 2.5 acres of land to pay for the treatment. “We spent around Rs 12 lakhs for her treatment. But she died a year after being diagnosed,” Tomar said.
Now, Tomar is a landless agricultural labourer. He works on the farms of others for a daily wage. “I earn around Rs 300 a day. But often there are days when I don’t find work. We go hungry sometimes,” he said.
As a landless labourer, Tomar does not have access to formal sources of lending and will not benefit from the Rs 36,000 crore crop loan-waiver for small and marginal farmers announced by the BJP government in the state. “I borrow from sahukars who charge 3% rate of interest (monthly). Even for my wife’s funeral, I borrowed from them. This year, I borrowed Rs 2 lakh for my daughter’s wedding. Last year, Rs 50,000 for my son’s education,” he said.
Today, Tomar owes sahukars Rs 2.3 lakh. “It is a daily struggle to feed myself and my two sons. I don’t know how to save and repay the sahukars. They keep coming to my house everyday to ask for their money. And due to the high rate of interest, the amount I owe them keeps increasing rapidly,” Tomar said.
Haque says that all farmers, whether they own land or not, take loans from local money lenders who charge usurious rates of interest. “Moreover, it is small and marginal farmers who need to borrow from these informal sources as the amount of loans that they get based on their land holding is lower, compared to richer farmers with larger land holdings. And of course, the landless agricultural labourers have no option but to approach informal sources of credit,” he said.
“Ironically, the most vulnerable among farmers do not benefit from loan-waivers because a substantial proportion of their debt is from informal sources,” he added.
In a 2017 paper titled ‘Institutional versus Non-institutional Credit to Agricultural Households in India’, the authors calculated the distribution of farmer households in India by nature of borrowing – formal and informal. Their research, based on the Situation Assessment Survey of Agricultural Households, 2013, shows that loans from informal sources constitute 36% of all loans taken by agricultural households.
Tellingly, their research also shows that proportion of borrowing from informal sources increases as the size of land-holding reduces. For instance, 25% of all loans taken by farmers with large land holdings were from informal sources. Whereas, for marginal farmers, 45% of all loans taken were from informal sources, and only 55% from formal sources. The authors summarise, “Access to institutional credit increases as land size increases, while credit from non-institutional sources decreases as land size increases.”
“Paradoxically, it is the farmers with small land-holdings and landless agricultural labourers who need financial support. Yet, they are the ones who don’t have adequate access to formal sources of credit. And they are the ones who do not benefit from loan-waivers,” said Sudhir Panwar, president of the Kisan Jagriti Manch.
Haque does not believe that migrating to urban areas is a viable solution to the problem. “The solution often given by urban policy experts and most economists is that if farmers are finding agriculture unviable, they should move to urban areas and take up jobs there. My question to them is ‘where are the jobs?’” he said.
Back in Nanglamal, Tomar’s eldest son Sandeep, 27, works in the Nanglamal sugar mill, earning Rs 160 daily for one eight-hour shift. “I put in two shifts at the mill – 8 am to 4 pm, then 8 pm to 4 am. Our family needs the extra cash, desperately,” Sandeep said. His job at the mill is that of a security guard.
Sandeep had earlier wanted to work at a manufacturing unit and spent one year at an Industrial Training Institute (ITI) learning mechanical fitter skills. He finished his course in 2010 and was able to lay his hands on an apprenticeship at a Moser Baer factory in Noida, earning Rs 4,000 a month. “I worked there for six months. They had told me I would be offered a permanent job. But that did not happen,” he said.
Since then Sandeep has run from pillar to post looking for jobs in the neighbouring cities of Meerut, Hapur, Noida and Delhi. His search is yet to yield results. “Even with the ITI degree, I am unable to find a job. I can’t even spend too much time in the cities looking for private jobs, as my father needs help here,” Sandeep said.
Sandeep has applied to be a sanitation worker at several local municipal bodies as well as to be a clerk or a peon at the post office and at government banks but without success. “First, I tried applying for bank jobs. But the tests were too difficult and I realised I did not stand a chance. I have been applying continuously for the post of clerk and peon at the post office for the last seven years. It has been a waste of time,” he said.
“I have even applied to be a safai karamchari (sanitation worker). But did not get that either,” he added.
“Unfortunately, there is just nowhere for rural people to go. Youngsters want to move away from agriculture and take up jobs in cities. But there are no jobs on offer. Lakhs of applicants apply for a few hundred government jobs. The situation is dire,” said Panwar.
Also read: Low Prices, Delayed Payments and Pests Are Pushing Western UP’s Sugarcane Farmers Into Crisis
According to a 2015 report in The Hindu, there were over 23 lakh candidates for 368 peon posts in the state secretariat. Among the applicants, 2.22 lakh were engineers and 255 held PhDs.
In 2016, the Indian Express reported that more than 20 lakh people had applied for about 20,000 posts of safai karamacharis in UP – a contractual appointment with a salary of Rs 16,000 a month. Many of those willing to clean roads, gutters and dive inside sewers held MBA, MSc and MCom degrees.
Haque terms this a policy failure of the government overlooking non-farm employment in rural areas. “There has been a total policy failure. The government has put in no effort to open up avenues for non-farm employment in rural areas, in the hope that somehow everyone will be absorbed by the urban areas. That has simply not happened,” he said.
In Nanglamal, Tomar’s youngest son, Ankit,19, is studying in class 12 at the government school in the village. “I don’t know what the future holds for him. I keep telling him to study hard – and he does. But even that may not be enough for him to get out of this poverty that we are stuck in,” Tomar said.
“Aisa lagta hai dal-dal mein phans gaye hain (It feels like we are stuck in a swamp),” said Tomar as he put his arm around Ankit.
Kabir Agarwal is an independent journalist whose writings have appeared in The Kashmir Walla, The Times of India, Mint, Al Jazeera English and The Caravan.