Small farmers needs low cost credit

SMALL farmers in the country are bearing the brunt of the months long political crisis as they were unable to sell their produce to markets in time and had to witness the rot and destruction of vegetable in the fields. In this situation the Bangladesh Bank has asked the commercial banks to give loans to small farmers at low cost. But the scheme appears to be missing the target due to bureaucratic bottlenecks. Reports said farmers have also failed to receive delivery of inputs for new plantations as they are failing to pay for it. This is because most small farmers have failed to get due price for their produce and incurred financial losses. This in turn is creating a critical situation in which they are failing to repay loans to banks and other lenders. Moreover they are failing to buy new inputs for next crops with the money they are receiving on sale of vegetable at low price. The Boro (paddy) cultivation season is in progress. But farmers are facing financial crunch to meet the expenses and they are blaming the recent political unrest as the most singular issue which has destroyed their fate. 
Bangladesh is vulnerable to climate change, flash floods, cyclones and drought which often hamper production of crops and their yields. Farmers often remain vulnerable to such uncertainties. Most banks provide loans to large-scale farmers as they have asset to offer collateral or for long business relations. But banks do not provide loans to small farmers and most of them even do not understand the nature of the need for credit of small scale farmers either, according to experts. In this situation, the central bank has asked banks to provide loans to small farmers under sharecropper loan scheme. But it is feared that the objective of the loan scheme is remaining largely unfulfilled due to volatile politics.
Farmers’ access to credit is one of the major problems in the countryside. This is a major drawback in the effort to achieve self-sufficiency in food production. The country has to spend billions of taka on subsidy in agricultural sector every year. It goes mainly to providing basic input support to farmers to boost agricultural production. There is almost no provision in the budget to save the small farmers who suffer for low prices of produce. Furthermore, skewed implementation of procurement drive often plays as a major hurdle on the way to provide reasonable prices to producers at the farm gate. A section of traders close to those inclined to influential persons are benefited.
Agriculture contributes nearly 20 per cent to the GDP and 70 per cent people depend on agriculture sector to earn a livelihood. The government also receives the highest amount of revenue from the sector. Farmers produce amply but remained deprived of good returns. Consequently they produce less in the next season to create a mismatch in supply and demand. We urge the banks to disburse loans to farmers and the central bank should monitor it so that farmers are not going to suffer from short of credit.

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