More than Organic Mission required to assist farmers
When seventy per cent of the population, that majority living in rural Sikkim which registers agriculture as their profession, is extended less than 3% of the loans advanced by banks in Sikkim, one knows that an inexcusable denial is afoot. As per stipulations governing banking practices in the country, loans to the agriculture sector should constitute at least 18% of the total advances released by banks. In Sikkim, this figure stood at a dismal 2.90% as of 31 March 2016 as per data featured in the 39th State Level Banker’s Committee. It would have been all well if the under-performance by banks was because farmers in Sikkim were so well off that they did not need loans to improve the productivity of their farms. But that is obviously not the case. Public sector banks achieved only 37.90% of the target they set up for themselves for agriculture sector loans. But wait, the figure gets even more dismal when one realizes that although 37.9% of the targeted loans were disbursed, these covered only 13.1% of total beneficiaries they had aimed to cover. One cannot understand this hesitation when one also notices that recovery for agricultural loans was at a handsome 63.5% for Sikkim against the dismal 14.9% for loans to industry. If agriculture receives the right boost in the form of adequate loan support, rural Sikkim will prosper. That much any one can figure out. But what confounds is why that is not happening.
Of course, the situation of fewer new generation hands taking up the proverbial plough is not unique to Sikkim. Census 2011 informs us that 42% of the nation’s farmers would, if given the choice, quit agriculture. It is into this frame that Sikkim’s situation needs to be viewed. There might not be desperate poverty among the farmers in Sikkim, but the sector has obviously plateaued out and is now on the decline which is why fewer families have the new generation tilling the fields. This is not to suggest that the children of farmers should remain farmers, but is an argument to highlight that dignity needs to be brought back to the sector and more youngsters allowed the chance to leverage their wider exposure, keener scientific temperament and higher ambitions to revolutionise agriculture in Sikkim.
The State Government, to its credit, has undertaken the right policy decision by pursuing the Organic Sikkim mission and identifying horticulture and floriculture as thrust areas for the rural economy. Organic Sikkim, even as it strives to resuscitate agriculture to its original, un-poisoned by pesticides roots in Sikkim, also capitalizes on a growing respect for organic products in the world market. But it will take more than awareness workshops by “service providers” to deliver the real results. Such a turnaround can begin if capital formation in agriculture and allied sectors is accelerated. Sikkim has the benefit of being in a situation where agriculture loans are required not for sustenance but to propel the sector to a new level of prosperity. The investment is required because as per the Agriculture Census of 2010-11, 77% of the farmers in Sikkim fall in the small and marginal category, working on average farm sizes of 0.64 hectares. The general consensus on the minimum size of farmland to allow a farmer the space to “do well” is at least one hectare. Hence, for farmers to prosper, or even remain relevant, they will need to invest in their small landholdings and improve productivity through better irrigation, improved seeds, wider diversification and adding sources of livelihood like poultry and animal husbandry. This should ideally come through agriculture loans.
To draw a positive from even the current status of poor banking support for agriculture, this situation allows Sikkim the benefit of learning from the horrors of farmer indebtedness which has torn through wide swathes of farmlands across the country. If the policy-makers decide that banking support for agriculture should be expanded, they should first ensure that fiscal prudence and financial planning is instilled in rural Sikkim. Urban Sikkim already has a very poor track-record of loan repayments, but that spectrum has the cushion of salaries and commerce to tide them over, rural Sikkim is not as privileged, but its resilience is a strong asset to keep the loans safe and serviced if the people are first informed about banking and loan repayment processes.