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Haryana Failure to Popularise Kisan Credit Card

Haryana Failure to Popularise Kisan Credit Card, naya haryana, नया हरियाणा

3rd September 2014

Naya Haryana

To promote agriculture and support farmers, the Government of India has come out with various schemes of finance available at low interest rates.

In Haryana, there are several finance schemes that offer easy credit finance through the Kisan Credit Card to help finance acquisition of agricultural land, for acquiring irrigation facilities  both micro, as well as macro, for purchasing farm-related machinery and for purchasing various agriculture-related inputs like seeds, fertilizers, pesticides, etc. However, a majority of these schemes and benefits do not reach all farmers in the state.

Problems faced by farmers in Haryana

Farmers face several challenges with the biggest being the risk of crop failure. Crops can fail due to inadequate monsoon, crop disease, natural disaster like floods or earthquake, man-made events like war or riots, etc. In all these events, the farmer loses his investment and time, resulting in financial losses that are hard to recover from. Due to lack of timely support from the state government, many of them end up taking their own lives.

According to National Crime Records Bureau (NCRB), in the year 2012, there were 276 farmer suicides in Haryana. This is shocking statistics for a state that prides itself as being an agrarian state and one of the best contributors to agricultural production in India.

Why has the Hooda government allowed this situation to happen where farmers are pushing themselves to the extent of taking their own lives?

In the earlier days, when there was no institutional finance available, farmers had to rely on the local money lender to get loan assistance. This always came at a high interest that was difficult to repay, even when the there was a good crop. In cases, of crop failure, the farmer had to go and seek additional finance from the money lender and would thus get trapped in a vicious cycle of debt, which very often carried forward to the next generation. In return, the farmer mortgaged his land and ended up as a bonded labourer of the money lender.

Then there was the problem of availability and maintaining of cattle that supported the farmer. The health and fitness of the cattle was vital to the farmer in his farming activity and any impact on the health of the cattle, put severe pressure on the farmer, both financially and physically. In years when there was a crop failure due to failed monsoon, there was invariably a drought situation that led to cattle starving due to shortage of fodder. This too would add to the farmer's woes.

When there is crop failure due to bad monsoon, there is also a problem of getting good quality seeds for the next season. Lack of access to money at the appropriate time, puts the farmer in a tough situation, as he needs the seeds for the next season.

Then there is the need to constantly buy and use fertilizers, pesticides, etc. for each season in order to ensure a good crop. Lack of finance to buy these has always been a major challenge faced by the farmer.

Lastly, for farmers with larger land holdings, availability and affordability of farm labour has always been a challenge during the sowing and reaping season.

In all the above situations, there has been little initiative from the state government to provide timely help to the farmers who face losses and it took central bank's intervention to offer solutions to these suffering farmers.

Central agencies  initiative to help farmers

To address the problems and risks faced by farmers, various banks and financial institutions stepped in to provide a range of schemes to meet the farmer's needs. Today, the farmer has access to easy finance and does not depend on the local money lender anymore.

Be it the purchase of land or a tractor, there are several banks offering a range of finance schemes that a farmer can avail. The same is true for funding land acquisition on lease or purchase, finance for buying seeds, fertilizers and pesticides etc., all of which is now much easier.

Kisan Credit Card (KCC); a farmer's friend

The Kisan Credit Card was first introduced to facilitate easy access to cheap finance from banks in the year 1998-99. KCC was an initiative of the Government of India, Reserve Bank of India (RBI) and the National Bank for Agriculture and Rural Development (NABARD) with the objective of helping farmers get affordable credit without going through the cumbersome paperwork to process each loan.

The KCC ensured that the farme's net worth based on his assets and land holding, authorised him to a certain amount of credit that he could avail in a year. Once authorised, the farmer does not require filling any forms or applications, and can simply go to his bank and withdraw the needed amount using the card, slip or passbook.

The method of calculating the farmer's credit amount is based on the land size being cultivated to the scale of finance for that crop and subject to a maximum limit of:

  • Cash credit: Rs. 45,000/-
  • Crop credit: Rs. 15,000/-
  • Loan period: not exceeding 12 months
  • Card validity: 3 years

In case the loan is above Rs. 1,00,000/- then collateral security by way of mortgage of land is required, in addition to hypothecation of crop.

The KCC is a boon to farmers who can now plan a quick response to crop situation and take necessary steps to ensure that his crop stays safe and on schedule till cropping period.

Who can avail the Kisan Credit Card?

The KCC can be availed by land owning farmers, tenant farmers, share croppers and individual farmers. Unfortunately, even today there are many small and marginal farmers in Haryana who are unaware of the existence of the KCC and the Hooda government has taken no initiative to try and bring these smaller farmers under the cover of the KCC.

Misuse of the Kisan Credit Card

Unfortunately, the KCC has been misutilised by some farmers in using the money for purposes other than agriculture like, financing marriages and other events in the family. Can the state government state what steps it has taken to prevent this misuse?

State government has done little to reach out to small farmers

Unfortunately, the state government has not done enough to inform all farmers about the KCC and its benefits. There are several small and marginal farmers who are still unaware of the KCC and who do not even possess one. Unfortunately, the farmers usually learn about the KCC through word of mouth rather than any state government communication or promotion and therefore, they are unaware of its features, benefits and limitations.

Our approach

We believe in going to the farmer rather than wait for him to come to us, unlike the approach of the present administration. Agriculture is the mainstay for Haryana and all those directly involved in cultivation must have the KCC. Under our plan for Naya Haryana, we shall ensure a direct contact program to ensure that all farmers, both large and marginal, are not only well informed about the features and benefits of the KCC but also ensure that every farmer possesses one.

In addition, we also plan to work towards crop insurance. This is unfortunately not available to farmers at present but we shall strive to make sure that some form of crop insurance is there to protect the farmer, especially the farmers with small land holdings. Unless we all respect and take care of our farmers, the dream for a Naya Haryana will remain incomplete.

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