Farmers need Formal Financing: India Central Bank chief

Millions of small farmers are struggling to survive as erratic weather hits their only source of income [Xinhua]

Amid anger over rising rural distress and farmer suicides, Indian Central Bank Governor Raghuram Rajan on Saturday called for small and marginal farmers across the country to be provided access to formal financing.

He also said that lack of formal financing is bigger problem than excessive burden of informal financing.

“The need of the hour is to expand formal institutions to every corner of country. In the last few days, we have seen the tragic picture of farmer suicides…(these) are complicated matters. There is no easy explanation to why somebody takes ultimate step. One should neither take it lightly nor offer too easy an explanation. It needs to be studied,” Rajan said In New Delhi on Saturday.

The Central Bank Governor further laid emphasis on providing formal finance to small and marginal farmers who really do not have access to it.

“We need to look at whether we have right institutions.?Whether we have right incentive in the system,” he added.

Land acquisition is a contentious issue in India, where small holdings by families with no source of income other than farming are common.

The Indian government has passed an executive order to make land acquisition easier for industries, overhauling an earlier law passed in 2013.

The decision by the Narendra Modi government removed a requirement to get 80 per cent of the landholders’ consent in the case of projects in defence, rural electrification, rural housing and industrial corridors.

Unseasonal rains and hailstorms the past few weeks have damaged the winter-sown crops of millions of Indian farmers.

Hundreds of Indian farmers have committed suicide these past few weeks over debt worries, local media reports and farmers’ advocacy groups say.

Cloudbursts damaged soybean and sorghum crops that were ready to be harvested, forcing farmers into debts that they could not pay due to the latest crop damage.

Unofficial reports put farmer deaths in the state of Uttar Pradesh in the month of March at 100, while the government confirmed 35 farmer deaths. Meanwhile, the Marathwada region in the state of Maharashtra has put the suicide toll of debt-ridden farmers at 226 in the past three months.

Millions of small farmers are struggling to survive as erratic weather hits their only source of income. They are seeking government help to stay afloat until the next harvest, but bureaucrats are moving slowly to record crop losses.

Indian daily Times of India reported earlier that most farmer deaths don’t figure in the official list.

 

TBP