Multiple loans and a long summer ahead

Sheela Rathod was the first to consume a bottle of weedicide in their home. An hour later, as she was being rushed to a government hospital, her husband Mohan, consumed the second bottle. In a span of two hours on December 19, 2015, the husband and wife farmers of 4 acres in their mid-40s lay alongside battling for their lives in the Yavatmal hospital, their two shaken teenage-sons by their side. On December 22, Sheela lost the battle for life. Two days later, Mohan died.

“They were conscious all the time but the poison had spread in the body and could not be removed,” says their elder son, Santosh, wearing a cap to hide his tonsured head. The after-death rituals over, he is slowly coming to terms with the hollowness that, he says, suddenly surrounds him and his brother. Their immediate tension however is ‘debt’. “What do we do of the loans our parents took?” The list of debtors is long and includes of both formal (such as bank) and informal (money lenders) sources, he says.

It’s barely a fortnight since the two died, but Deonala, a village about 40 km from Yavatmal in Vidarbha’s cotton belt, is on the edge. Two others had committed suicide in October. They had mounting loans, and like that of the Rathods, rain-fed fields with failed crops: no soybean; no cotton; no lentils. For several years now, they say, they have not seen a good agriculture season that brought good monetary returns.

Almost every family in the village of 1500 people is reeling under debts that they can’t repay. Bad crops apart, there’s no work to be found. No cash in hands to meet exigencies. No source of money in sight. Most have no idea of how to sustain the next six-eight months until the next monsoon arrives and first shoots of a new crop show up. Deonala is staring at a long summer ahead, they know.

This is but a representational example of an unfolding new crisis that government and policy makers call scarcity – of water, crop, food and cash – that’s going to test both, the people and the government. For, this might turn out to be the toughest drought in the recent history for the peasant-farmers of not just Vidarbha, but many other regions – Marathwada, Bundelkhand, north-Karnataka, Telangana, parts of Chhattisgarh, Gujarat, Rajasthan, western-central Odisha, stretches of Indo-Gangetic plains, and even Haryana. For some regions, this is an annual aberration. For others, it’s a continuation of drought.

More than 100,000 villages and several small towns are in acute crisis if one adds the tally of blocks and tehsils declared scarcity-hit by ten states after the revised or second crop assessment in November. The severity is invisible at this stage; it’s the peak of winter and on fields in some parts the winter crop is yet to be harvested. In many parts, like Marathwada, Bundelkhand, or north-Karnataka, drinking water scarcity looms as artificial storages and the rivers run dry. And farm suicides are back with a vengeance in the areas under scarcity: local language newspapers are reporting three to four suicides every day.

About 300 km from Deonala, in village Dadham of Akola district, 15-year-old school boy Vishal Khule killed himself on the morning of November 22, a few days after Diwali, in his small home, while his mother cooked chapatis. When he collapsed, his parents noticed a white liquid oozing out of his mouth, and the emptied can of “poison” lying by his side. Vishal was a 9th class student of Maharanapratap Vidyalaya in Akola town. He would commute to his school and also help his 2-acre father Vishwanath on the farm when he was back.

His elder brother Vaibhav, 18, has dropped out and works as a daily-wager wherever he finds work. In Diwali, Vishal worked with his brother, but could not earn enough to buy new clothes and some school books, his father said. The Khules belong to an Andh tribal community. The village has marginal farmers, who double up as farm labourers to make a living. But with their own fields lying empty and drought wrecking the farms of big farm owners, there’s no farm employment.

“This is the worst year and a continuation of drought for last three seasons,” Akola district collector, G Sreekanth, said. “We began preparing for the coming summer in September, last, even when monsoon was to officially end.” The administration sensed the impending crisis when rains failed completely.

Akola, like many districts in Maharashtra, received only 60 per cent of its average annual rainfall of 692 mm. “That’s around 500 mm rains, which may not sound all that bad, but we got 400 mm of that in two days, on August 4 and 5,” he said. After August 5, Akola recorded 41-day gap in rains – a very long dry spell, he said. “Every crop has failed: soybeans, cotton and tur (lentils),” he said. “People don’t have money in their hand and there’s going to be shortage of water,” he said.

It was the crop failure and lack of money that drove Bhimsagar Sonone, 39, and his wife Vrushali, 35, to attempt committing suicide on November 12, a day after Diwali, in a fit of rage, in their home in Pardi, about 80 km from Dadham in Akola district, but they miraculously survived. Like the Rathods did, they too consumed a bottle full of weedicide, meant for the crop of green gram on their two-acre farm. They were saved because they got medical aid in time.

“It was wrong of us to have done that,” they said at their Pardi home, still visibly depressed. The couple has three children, a daughter and twin-sons. A day after Diwali, the two fought with each other, just as any couple would. The reason for conflagration though, was there was no dime to buy new clothes and get their children some Diwali crackers, Vrushali said as she cried. The anger over distress spilled over. Farming in rain-fed conditions has become a never-ending drought, Bhimsagar says, nailing one of India’s biggest structural problems of poverty and growth bottlenecks. “Without water you can’t farm.”

They narrate the story that the Rathods would have, if they were alive: The farm yielded nothing; loans mounted; cash flow choked; tension and desperation built up; household expenses became difficult to be met; and no sustained work could be found. He had mortgaged all of Vrushali’s gold ornaments.

Multiple loans

Back in Deonala, Sheela’s death has added to the burden of the 19 women of her age, members of a self-help-group. For, after her death, the remaining must repay her equated weekly installments of loans they took from different non-banking financial institutions that seem to have mushroomed in this part.

“Do something, these loans are giving us blood pressure,” pleads Pramila Rathod, a neighbor and one of the senior members of the group. “I am working overtime to mop up funds to repay the debts.”

Sheela like these women juggled multiple loans that add up to between Rs 75,000 and Rs 1 lakh, to be repaid over two or three years, on a weekly basis. “Everything else stops,” Pramila says, “not the loan installment.” Together, each woman must pay Rs 4000 or more every week or so – Rs 15-16000 a month depending upon the number of loans each one of them has taken from the micro-finance companies.

When most cotton growers in rain-fed conditions don’t make even Rs 10,000 in profits from their farms, juggling multiple loans several times their frugal income is a sign of a vicious debt cycle they have landed themselves in – it’s a ground similar to the one that triggered a spike in farm suicides from 2005 to 2008.

Pramila shows us the pass-books for each of her loans: there’s Equitas; Vaya Finserv Private Ltd. (which formerly was called Outreach Financial Service India Pvt Ltd); there’s Jan-Laxmi finance and there are a couple others whose passbooks the women could not show us. The group has to split within themselves the installments of Sheela and when they are struggling to repay their own, it is a Himalayan burden.

Each of these loans comes at 20 per cent or more interest rate, much higher than the ones salaried class pays on buying consumer goods. Most of them have willingly and knowingly opted for multiple loans for the lack of options. Pramila explained it: “Our bank loans are unpaid; we have not been able to pay our bills for inputs to the dealers; private hand loans remain unpaid too, so who would lend us?”

Enter the companies, ready to dish out small cash to a group without any collateral, and the families, desperate for money, latch it up – without thinking of the consequences. The money goes into farming and when farming fails, the loans trigger a vicious repayment cycle for which you must borrow more.

Deonala’s women have much of their gold mortgaged with private lenders or jewelers; pawns they are unable to free. Cattle prices have tanked as buyers shrink and a cow-slaughter ban hits the beef business in the state. Government aid would be far too less and come mostly in band aids, the villagers rue.

Babusha, Mohan Rathod’s elder brother, has loans; so have two other brothers, Baliram and Raju. Their wives, members of self-help-groups, are indebted too – to the same micro-finance institutions.

An agent of one of these companies said on the condition of anonymity that his company has a deep penetration of micro-loan business in Vidarbha and it is expanding fast. The loans look small but they yield big returns. Since there are no collaterals, it’s the easiest route to cash, but also an equally difficult cycle to come out of. The lenders know most borrowers use it for agriculture purpose and when nationalized banks refuse to lend more to the defaulting account holders, they lend at a high risk.

A fiercely hectic repayment schedule, very high penalties on default, and a collective pressure builds up tension, says Pramila, extremely worried about her next repayment. “The day Sheela died we repaid her installment,” she says. “If her sons find some work and earn some money, it will be good for us.”

In their last moments, Mohan and Sheela kept telling their sons, that they were sorry for them; that they must look after each-other; and that they should move out of the village if they could.

In their two-room hut with a mud-littered front-yard that has a thatched shade, there now hang framed photos of Mohan and Sheela who tilled their lands laboriously and raised their sons frugally.

Where do Santosh and his younger brother Sandeep go from here? “We are finding it very difficult to get work outside,” Santosh said. There are hundreds like them wanting work. Both had dropped out of school after the ninth class. “We can’t farm this land,” he said as he took us around an arid, stony, land at the foothills of a small hillock, a few km of walk from their home. It’s a ten-acre stretch, of poor soils, that Mohan tilled with his three elder brothers. This year though, in addition to his share of four acres, he had leased ten acres from a tribal farmer and invested in cotton and lentils, hoping for a better return, his sons said.

Mohan expected at least 40 quintals of cotton from 14 acres; he got three. Lentils are fetching a good price in the markets, but Santosh rued the fact that the plants have no pods. This field and stretches as long as one can see are a spectre of doom and gloom – a dry anaemic land with cotton and lentil plants that have fallen lifeless.