Your columnist spent six days touring the districts of West Bengal, and interacting with everyone –from the Chief Minister Ms Mamata Banerjee to the members of the watershed user group committee in Kharibari Block of Siliguri sub division. The mandate was to see the impact of the BGREI (Bringing Green Revolution to Eastern India) on the ground, and take suggestions from the farmers and field level extension workers on how to enhance production, productivity and farmers’ incomes in a meaningful way. The tour took him to Nadia, Burdwan and Siliguri sub division of Darjeeling, and the filed visits made him understand that for BGREI to be successful, the Green Revolution technologies had to be adapted and suitably modified as the terrain, land holding pattern and institutional settings were quite different from those in the typical GR states, viz Punjab and Haryana.
The first point to note is the land holding size which makes it virtually impossible for the farmer to have any real savings at the end of the production cycle. However this has many other implications as well. Access to technology , seeds and fertilizer is far more difficult for the marginal farmer, as he has to access this from within a five to ten kilometer radius from the place of residence . Therefore the marginal farmer has to purchase his seed, fertilizer and pesticide from the ‘dealer’ in his close vicinity, and more often than not, there is hardly any choice – in terms of brand or even the retail price. In village after village, farmers complained that fertilizer is sold at 20-35% higher than the Retail Price mentioned on the bag. But they do not hold the dealer responsible, as he is one of them : he is picking up the fertilizer bag at the ‘retail price’, or perhaps even higher from the ‘stockist’ and sells it in small lots of five to ten kegs, for many marginal farmers have just a few decimals of land. Unless one has seen these fields, and discussed the issue with the marginal farmers, it is beyond the ken of realization. The same holds true for soil nutrients, pesticides and other inputs. Thus interventions from BGREI must include secondary freight subsidy to take the additional costs of transport from the stockist to the village level dealer.
The next issue relates to farm equipment. While Punjab and Haryana have more tractors per hectare of land than are required (as tractors are also a status symbol), marginal farmers cannot afford even the self-propelled power tillers. Therefore the establishment of an ‘equipment hub’ from where power tillers, reapers, ‘cono- weeders’ etc can be hired at a reasonable costs makes a major difference. This intervention has been most successful, and in village after village, farmers wanted that more such hubs should be established, and the range and number of equipments should be extended. This has also opened up new livelihood opportunities in the villages. It was learnt that equipment makers were also toying with the idea of setting up ‘custom hiring centres on similar lines to popularize their brands. If some support could be extended across the board to all those who manufacture farm equipment according to ISI specifications.
But the critical factor: indeed, the main driving factor, viz, credit needs special attention because the KCC has been designed for the middle farmer. Banks insist on land as a collateral, even thought RBI and NABARD have time and again reiterated the ‘homily’ that crop loans up to Rs fifty thousand on KCC do not require any collateral security. Looked at from the perspective of the bankers, each Kisan credit card increases the banks’ transaction cost, and adds up to work, without commensurate returns. Therefore the same story was repeated in every field inspection. Banks are not keen to give crop loans without collateral security, and getting land papers in order is extremely difficult. Now banks have come up with a new ‘silver bullet’ – the JLG (Joint Liability Group), perhaps taking the cue from the NGO driven, group based micro credit lending which has become increasingly popular in North Bengal. We were told that Asha, Samadhan, Bandhan, among others had established groups of twenty to twenty five women (farmer’s wives) and extended them uniform loan of Rs Fifteen thousand each, to be repaid over forty five weeks at the rate of Rs 375 per week, which means an effective interest of 14% per annum. This helps them get inputs for agriculture, or meet medical contingencies, and the transaction is simple. The KCC on the other hand lays down a schedule every year – for rice, wheat, jute, potato – and banks are expected to finance only this amount at three intervals – makes it a rather cumbersome financial instrument. The KCC will have to be simple to be effective. If Rs fifty thousand can be given collateral free, then why have a district wise schedule for crops and the insistence on land papers. Else, it makes better sense to support MFIs in rural areas. The JLG may not be able to compete with these groups – for they require a minimum size, and regular follow-up, which cannot be an ‘add-on’ function to the rural bank. Rather the Banking Correspondent model, which is announced with great fanfare in many seminars, should be implemented in the right earnest: they may offer an alternative because they can afford to be nimble and flexible and with least transaction costs.
Last but not the least, for BGREI to succeed, we need many more primary processing units – rice mills, daal mills, oil processing units , besides of course better connectivity and mobile towers. But more on this, next week !