Harvest hopes wilt in cash flow cut from money-lenders

BHUBANESWAR: One of the positive fall outs of the Centre's black money clean-up drive has been the checking of the practice of illegal money-lending in rural Odisha. This business has come to a grinding halt. Though economists may give the slump a thumbs-up, the agrarian community is feeling the pinch because of the sudden cut in the flow of cash.
This is the season when farmers turn to informal sources to borrow cash for a short period.They use the loan amount to employ labourers for harvesting. After selling their produce, they repay. The money-lenders charge a high interest and sometimes they lend money in good faith with little or low interest to the marginal farmer.
Since demonetisation hit the market, both categories of money-lenders have disappeared. No one in the villages is lending money on grounds of shortage. "We will pay the labourers after selling paddy. We will end up paying more," rued Deepak Sahu, a farmer from Lenda village in Barpali block of Bargarh district.
In the absence of the informal loan providers, farmers are neither able to harvest their crop nor prepare for Rabi cultivation. Of the 46 lakh farmer families, only 24 lakh families (roughly) avail loans from banks and cooperative societies here. Others depend on private lenders. "Their sudden withdrawal from the business has given farmers a hard time," said a senior government officer. A section of those availing bank loans also turn to the lenders because the loan they get from banks is not enough, he said.