Chinnarajam, Andhra Pradesh: Chidambaram's loan waivers have been met with a wave of disappointment in Andhra Pradesh.
In Mahabubnagar, one of the worst hit areas, more small farmers have committed suicide – they could not pay back their dues, not to banks, but to local moneylenders.
Ramulu is one among many such small farmers who own an acre or less of cultivable land. Ramulu's son Chandrappa committed suicide last month, leaving behind a loan of about Rs 90,000 yet to be repaid.
"The banks give us Rs 3,000 per acre. That's not enough for us. We need at least Rs 10,000 to Rs 15,000 for the farm. What the banks give us is simply not enough," said a farmer, Ramlulu.
Each of the 1,200 small farmers in Mahabubnagar is in debt. 70 per cent of them have borrowed from local moneylenders who charge an interest rate at three times the rate charged by banks.
The other 30 per cent, who have borrowed from banks, are also in debt with these same moneylenders.
Union Agriculture Minister Sharad Pawar has offered a solution to the moneylender problem.
“I urge farmers not to repay loans taken from moneylenders. They have no moral obligation to repay these illegal loans. State governments should protect farmers from these moneylenders,” Pawar said.
A National Sample Survey study showed that 82 per cent of farmer households in Andhra Pradesh are in debt.
There would be many who will not be covered by the Centre's waiver benefits. That is because the agricultural year here begins in September and loans are taken around that time, not in March.
"If this March 2007 deadline is implemented, only 50 per cent of our farmers will benefit. The other 50 per cent will lose out. So we ask the government to extend it till December 2007 so everyone is covered,” stated farmer and former Sarpanch of Chinnarajam village, Veeranna.
The state government says 60 lakh of the 1.15 crore farmers in the state will benefit from loan waivers, but the reality is that a large majority of them have not borrowed from banks.