Meghalaya has less indebted farmers

 SHILLONG: Meghalaya is known to be one of the least agriculturally developed states but it has been revealed that the state accounts for the one of the least number of indebted farmer households in the country.

While Meghalaya has merely 4.1 per cent of indebted farmer households, Arunachal Pradesh stands second with 5.2 per cent of the same, which are amongst the lowest in the country.

"We are looking at increasing institutional credit flow for reducing dependence of farmers on non-institutional sources of credit. The credit flow has increased from Rs 86,981 crore in 2003-04 to over Rs 4.75 lakh crore in 2011-12," said an agriculture department official.

The official revealed that though the Centre is pushing for credit coverage for the entire farming community, only 50 per cent of total farmer households in India are under the agricultural credit net which includes both formal and informal sources of credit.

"With farmers suicide due to huge debts sounding an alarm across the country, the need of the hour is to find ways to emancipate the farming population from this perennial woe and this is an area where the government ought to shift its focus to," the official added.

In fact, in hilly states such as Meghalaya, a large segment of small and marginal farmers are excluded from the institutional financial system. The flow of credit is skewed across states and regions. Even within the states, there are sharp differences in credit flow to developed regions, regions with greater access to physical infrastructure and regions closer to urban centres as compared to underdeveloped regions.

"Due to a lack of banking penetration in remote areas, farmers, specially small and marginal, are largely dependent on moneylenders for credit against collateral. The government's agricultural credit schemes are far from their reach making them vulnerable to higher cost of credit," observed a senior official.

According to a National Sample Survey Organization report on indebtedness of farmer households, of the 89.35 million farmer households in the country, 43.42 million are under debt. The report says that the most important sources of loan in terms of percentage of outstanding loan amount are banks (36 per cent) followed by moneylenders (26 per cent) and co-operative societies (20 per cent).