AN ORDINANCE WHICH WILL GET LAND BILL PASSED IN NO TIME!

Hundreds of farmers committing suicide every year is a blot on the governance and also a glaring example of how our society has been exploiting all these years the poor and almost illiterate farmers with small holdings. This has resulted in well heeled educated farmers usurping all financial and other facilities provided to small farmers in connivance with local bankers and government officials. Needless to say if thousands of farmers commit suicide because of financial problems, lakhs of them should be undergoing extreme difficulties. How could we expect the nation to progress and develop when millions of our farmers suffer in silence?

To get our farmers out of this quagmire, Modi government has taken its first step by making banking facilities available to farmers on very easy terms. This will go a long way in mitigating their misery when it comes to their financial needs in future. But what about the loans and accumulated interest they owe to local money lenders? These loan repayments will eat away a major part of the funds made available now. Then they will again face the same situation faced earlier. Shortage of funds. Where will they go for regular expenses? No amount of government help, short of writing off those loans, will help them  in this direction. Even if it is done, it will be very unfair to other farmers who have lived frugally and suffered in silence all these years.

I believe there is a viable solution to this problem. Government should promulgate an ordinance, which cannot be questioned in a court of law, with following provisions:

1. All private money lent to farmers against their land and house at rates above the bank rate for fixed deposits for 10 years, will be illegal. Rate on all existing loans will be reduced to this level with immediate effect.

2. No transfer of title to any land and house owned by a farmer will be valid on the basis of any documents executed by a farmer previous to this date. This will safeguard the farmer from signing backdated deeds to escape provisions of this ordinance.

3. All private money lenders will have to register themselves with local authorities and keep regular books of accounts with all details. They should issue receipts for all loans given by them clearly indicating all details including the rate of interest, amounts deducted from the loan before disbursement for any purpose whatsoever, complete details of any security taken, original documents pledged, etc.

4. No fresh loan to any farmer by a money lender will be valid unless it has been attested by an authorized official of a local bank, including co-operative bank, with the remark why the loan cannot be given by the bank to the farmer.

5. All private money lenders will within 3 days of promulgation of this ordinance, deposit all records kept with them to the specified authority in original in a sealed package which will be kept in government treasury and be accessible to only government appointed auditors.

6. Govt. will appoint auditors who will determine the amount of original loan availed by farmers and the interest paid thereon till date separately. If the interest paid already on the loan exceeds the interest payable for the duration the loan was availed at the prescribed rate, such excess payment of interest will stand adjusted against the loan and the new rate of interest will be as prescribed by government. If the excess interest is more than the loaned amount itself, the loan will stand extinguished.

7. All banks will be authorized to give a fresh loan to a farmer to extinguish the loan already taken, modified as mentioned above, against his land and house from private money lender(s). The loan(s) will specify a minimum amount payable periodically towards interest and principal. Banks may prescribe their own incentives for repayment of principal and interest within various periods. Such loans will also include a life insurance premium of the farmer and assigned to the bank.

8. It should be made compulsory for registering any deed pledging land and house with a separate agency. All such documents unless registered within a short period of execution, should become invalid.

9. Government should announce well before sowing season how much loan will be given per unit of land for which crops. This should be based on the probable value of crop when harvested. Banks should give loans on this basis provided the crop is insured before hand and assigned to the bank. Farmers should give an undertaking that they will pay back the loan amount after the sale of crop before the proceeds are used for any other purpose. If there is any failure of crop, the bank will have the first lien on the insurance amount.

It is also high time that private or government agencies open on line service, both voice and text, for helping farmers and the poor for the various problems that they might be facing in the areas of farming (such as weather condition, availability of inputs, laboratory facilities for fertilizers, pesticides, financial needs, etc.) I am sure private companies can encourage their staff to volunteer their time for this purpose.