Village Money Lender: A Well known villain since the days of Normans in England. It culminated in the form of Holocaust in World War 2. Centuries of pented up anger was used during those 10 years trying to exterminate the European version of the local "Sahukar". But are they really that bad? After all they are also in the business to make a living..and for that matter make a living as comfortable as possible.
Any news story in India regarding a suicide must and should mention the high interest rates being charged by the loan sharks. Obviously bigger institutions don't do that. That's why the village money lender should be a villain. But there are number of differences the way the Village money lender and the Banks/Financial institutions operate.
1. Money Lender faces a greater risk of total loss of money in the case of the failure of the crops. The farmer with no "Immediate Value" Security cannot but keep only the land in lieu for the money. If the crop fails, the farm is not salable as the legal process takes far too long.
2. If the crop fails, mostly it will fail in all the nearby areas. The money lender with limited spread of money is faced with total loss of existence. This is not the case with bigger institutions.
With the above mentioned causes, it is but inevitable for the money lender to charge higher interest rates as long as he can recover it. This makes proper business sense as he is taking far greater risk.
Instead of blaming the lender for being too harsh, it will be better if government can provide some insurance to the money lender on the money lent. This will lead to reduced interest rates ask the risk is mitigated. Instead of providing Minimum Support Price which is often politically motivated and reaching the undeserving Rich Farmers, this will help the genuine small farmers.
Instead of blaming the money lender, bring him into the folds of accountability. This will be more beneficial to the really deserving farmer population.
4 comments:
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i am in sync with you. Farmers in villeges dont have access to any other money lending sources. when they have to cultivate soem crop, they need some money for sure. where from they are supposed to take it from? and, surely its not good to paint thsoe guys as villains becuase, theyt r the guys who are keeping the rural economy moving!!
i have always been wondering why we are having different stands on land lors in villeges. in land reforms, huge amount of properties were snatched form owners and given to people whoever was cultivating there. But, as far as i have seen, this was not a success though it has helped in reducing the gap between village rich and village poor. but the why we r not talking about distributing assets of tatas or ambanis amongst the people who really work in their industries??
my view is that farmers issues cant b addresses neither with 'pure communism', nor by 'pure capitalism'. Even rules and laws dont have much of reach to uneducated masses..
nice post dude...
well written.What I think , reason for suicide is more of lack of education of the farmer than the lender.Poor farmers dont have the knowledge,how to manage money.Also they usually dont see that much of cash at once in their hand.I think they fail to make smarter investments/usage ,and probably spend money in marriage or buying some things.Or they dont have any idea which farming could bring them returns.
Better solution could be , a guide from every bank to the village which they lend money , to make proper money management.
rajesh h d
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