& çâÌæÚUæð´ ·¤è ¥ôÚU Îð¹Ùæ ÁæÚUè ÚU¹ð´ ¥ÍæüÌ ¥ÂÙð ÜÿØ ÂÚU ŠØæÙ ÚU¹ð´Ð ãæÚU Ù ×æÙð´, €UØô´ç·¤ ·¤æ× ·¤ÚUÙð âð ¥æÂ·¤ô ©gðàØ ·¤è Âýæç# ãôÌè ãñ ¥õÚU ÁèßÙ ·¤æ ¹æÜèÂÙ ÎêÚU ãôÌæ ãñÐ ÖÜð ãè ÁèßÙ ×ð´ ç·¤ÌÙè Öè ·¤çÆÙæ§ü €UØô´ Ù ¥æ°, çÁ™ææâæ ¥õÚU ©ˆâæã ÕÙæ° ÚU¹ð´Ð ŠØæÙ ÚU¹ð´, ÜÿØ ã×ðàææ ¥æÂ·Ô¤ Âæâ ãôÌð ãñ´ çÁ‹ãð´ ÂæÙð ·Ô¤ çÜ° ÂýØæâ ¥æÂ ·¤Öè Öè àæéM¤ ·¤ÚU â·¤Ìð ãñ´Ð

Lighten their load

A.S.M. Shahidul Haque
LACK of finance is identified as one of the main problems for the poor farmers in investing in agriculture in Bangladesh. It was also found in a study that farmers used their own savings in cultivation along with money borrowed from others (money lenders) on interest. The interest rate is generally 10% for every month. Another source of investment is credit, which is received in terms of input from the traders. The interest is built-in into the sales price of inputs used in cultivation. For example, seeds can be purchased on credit at a higher price. Farmers pay back the amount after selling their products.
Farmers generally cultivate their own land, while many take lands under sharecropping. Some farmers also take lease of land from other farmers. Some large and medium farmers sometimes engage sharecroppers to cultivate their land. The decision to cultivate different types of crop is often taken after calculating profit based on market price.
Farmers are very conscious about the costs involved in cultivation and the subsequent return. Financial
capacity, land condition, market price of crop, availability of inputs, knowledge of farming techniques, transportation, storage and other socioeconomic realities force them to decide which crop to cultivate. The decision is not a linear process, though finance is a major component in the decision making process.
It seems that profitability is one of the main reasons for cultivating cash crops. However, poor farmers think about food security and try to cultivate rice as far as possible. Moreover, many farmers are cautious in calculating profitability, and take into account the cost of irrigation, fertiliser, seed, labour and other related cost.
The production cost depends on the land quality, which differs from mainland to char and from char to char. Some farmers may need to spend more on irrigation and fertiliser than others. The difference in production costs also reflects the unwillingness or inability of the farmer to use the right inputs at the right time. Farmers who have income from other sources besides along with agriculture earn more than the farmers who depend on earnings from agriculture only.
Commercials banks do not give loans to farmers because:
• Most farmers do not have updated land papers.
• Most commercial and private banks do not have branches where farmers can get easy access.
• High risk because cultivation in Bangladesh is heavily dependent on nature.
• There is uncertainty about loan recovery.
• Banks do not have enough manpower to monitor the situation.
Micro Finance Institutions (MFIs) on the other hand are also not very interested in giving crop loans to individuals farmers for a season. The want groups and cumulative responsibility for granting loans. Moreover, weekly loan repayment schedule is not at all suitable for crop loan. So, poor farmers do not have any alternative but to go to local money lenders for financing agriculture.
The decision about how much money to borrow or how much credit to take depends on the profitability of the crop they plan to cultivate. If high profitability is assumed, then they may feel encouraged to take more loan or credit. On the other hand, low profitability will discourage them from taking loan and credit. Farmers judge the profitability of certain crops on the previous year's market price.
The judgment can go seriously wrong. For example, the market price of jute this year was comparatively high at grower level. So, the farmers may
decide to grow jute in the next season. Then more supply will decrease the market price of jute. Next year low market price will discourage farmers from cultivating jute. Again, lack of supply will increase the price. The point is market information and market mechanisms are not very clearly understood by our farmers. They depend on limited information and thus suffer more. The scenario is similar for all other major crops production in Bangladesh.
The lion's share of the profit (if any) goes to moneylenders or to input sell ers. On the other hand, if loss is incurred then it falls on the farmer. The pressure for loan repayment forces farmers to sell their crops early in the harvesting season when, generally, the market price is low. Moneylenders again take the benefit of low selling price, middlemen, input sellers, bulk purchasers as well as chatal owners who have storage facilities and can invest large sums of money.
Commercial banks do not give loans to farmers, but crop or agricultural loan is given to these chatal owners or input sellers. Thus, the loan meant for poor farmers goes to people who are not directly related with cultivation, and is used for exploiting farmers and distorting the market price.
The government, took many initiatives particularly by the central bank, to ensure loans for farmers. Indeed, financial support is vital for increasing agricultural production. There was a time when the agricultural sector contributed about 50% of the GDP, but it
has come down to about 20%. If proper support can be given in terms of finance, quality inputs, technology, fertiliser, irrigation,-transportation as well as fair price, this sector can take the countrymuch higher.
The question remains about the role of commercial banks (public and private) in disbursing loans to genuine farmers, who are not receiving loans despite huge allocations. There are problems in the banking process. Surely new and innovative ways and means are required to oven ome the barriers for granting loans to needy farmers. The call by the governor to use dhol to identify genuine farmers in the hats reflects the need for such innovations.
Experts from the government, central bank, commercials banks, MFIs, NGOs, educationists, and civil society need to sit together to address this issue. Until and unless the agricultural sector becomes vibrant, the economy of Bangladesh will not be able to break out of the "poverty trap." If the agricultural sector could get only a fraction of the financial support that was given to boost the RMG sector, it could do miracles. Concerned people should think about the financial problems of the poor farmers and suggest ways and means to ensure finance for agricultural production on an urgent basis.
ASM. Haque is a development worker. E-mail:shaque@winrockbd org