BENGALURU: As two more farmers committed suicide on Thursday, one in Gadag and another in Haveri districts, the question of why so many sugarcane farmers are choosing to kill themselves, became clear.
One, managements of sugar factories are refusing to buy sugarcane since April, making it difficult for farmers to repay their loans. Second, say sources in the government, is that private money lenders are driving these farmers to commit suicide.
Farmers borrow agricultural loans from public sector banks, offering their farm as collateral. In the process, they run out of options to raise secured funds.While these banks offer loans at 4-5 per cent rate of interest in addition to subsidies, farmers approach private money lenders for funds as their bills do not get cleared by managements of sugar factories.
These private money lenders, however, offer loans at extremely exorbitant rates of interest-5 per cent a month or 60 times more than secured loans of public sector banks. Easy access, and absence of any paperwork, encourages farmers to borrow from loan sharks.
The government, which recognised this growing trend, issued oral instructions to superintendents of police in all districts to crack down on these loan sharks. Last week, following the death of two farmers in Hassan, the IGP ordered the arrest of 62 money lenders and let them off after a warning.
Official source said when farmers fail to repay the mounting interest on loans, private money lenders send goons to recover the amount at a time when factories default on payment of arrears. The upshot: farmers commit suicide because they are under tremendous pressure to pay loan sharks, but have no cash in hand. On their part, officials cannot act tough against these modern day Shylocks because they are well-connected in political circles, and have the backing of local politicians.
