Agricultural loans should be made easier and more affordable to farmers

According to Bangladesh Bank’s statistics, in six months, from July to December 2020, banks have given loans a total of Tk 12,077 crore (USD 1420 million) to the farmers, collected Tk 14,091 crore (USD 1657 million) from the farmers at the same time. It means, banks have collected 22.53 percent more agricultural loans, compared to the total disbursement. Although, there was a special instruction from the Bangladesh Bank regarding the payment of installments, farmer kept on paying off their loan installments. It can be said that our farmers were at the forefront who worked hard towards a sustainable economy during the coronavirus pandemic. In 2020, Bangladesh Krishi Bank has distributed agricultural loans worth Tk 4,636 crore (USD 545 million) and despite the spread of COVID-19, the bank was able to recover Tk 4,000 crore (USD 474 million) that year. Real farmers are not defaulters and they have proved it even during the pandemic. Whenever they failed to repay a small loan, the law enforcers are always there to arrest them, but the big fish manage to escapes through the loopholes of the law.

It is difficult for a farmer to get a loan as we have prolonged negligence regarding the farmers and farming sector. According to a 2019 study by the International Food Policy Research Institute (IFPRI), farmers in Bangladesh typically borrow more than 81 percent of loans from various private sources, including NGOs, relatives, private banks and moneylenders. The interest rate of these loans is 19 to 63 percent while the interest rate is nine percent at Krishi Bank. But for some unknown reason, only 6 percent of the total loan comes from Krishi Bank. IFPRI's survey found that 36.4 percent of the total loans were borrowed from NGOs, where the farmer has to pay an interest of more than 20 percent. According to IFPRI, 19 percent of farmers take loans from relatives. 15 percent from the landowner, 11.4 percent come from moneylenders and 3.6 percent from various associations and cooperatives. Farmers get the largest share of the loan from the Krishi Bank, which is about 15 percent. Large, medium and small farmers together get 36 percent of the total loan while marginal farmers get about 5 percent. The total percentage of loan all the farmers get is 36 percent. Sharecroppers, the farmers who cultivate other people's land on lease, do not get this loan. As a result, they have to rely on loans from other sources, including NGOs.

Our country is entering the era of agricultural industrialization. Industrialists are investing in farming and agricultural technology is evolving and spreading fast. Small and medium farmers have to survive, otherwise, many will leave the profession and the number of unemployed people will rise. Small and micro-enterprises should be given a chance to succeed. Agricultural loans should be made easy and available.