Saturday, February 11, 2006

Co-op Credit for Vidarbha

Ajit Ranade reports on Vidarbha: Reviving co-op credit

A few of his insights:
  • Not all loans that farmers take are for crops. The loans could be for marriages or medical treatment.
  • The reason farmers continue to grow cotton despite it being a risky crop, is because the alternatives are far worse. That’s because if the farmer tries to diversify into vegetables or other perishable crops, in the absence of storage facilities, he is far more at the mercy of market forces. At least cotton does not perish like brinjals or tomatoes.
  • The lack of irrigation. Only two per cent of Vidarbha has irrigation as compared to about 90 per cent in Western Maharashtra. Most irrigation projects lie unfinished as government funds have become scarce and the government itself is reeling under a record debt.
  • Complete collapse of the co-operative credit system, driving farmers to money-lenders. For example all the 668 Primary Agricultural Credit Societies (PACS) in Amravati district are bankrupt.

    He goes on to cite an example of the Malkanur Co-op in Karimnagar, AP, which is running for 50 years and has helped rural credit and is autonomous and has no political meddling.
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