Dying over debt: High-interest loans drive over 100 Wayanad farmers to suicide in 15 years

A report submitted to the Kerala SHRC revealed the severe impact of high-interest loans from private moneylenders on the farming community.

ByDileep V Kumar

Published May 29, 2024 | 11:00 AM Updated May 29, 2024 | 1:18 PM

Farmers suicide.

A disturbing report by the Wayanad District Collector on farmer suicides in the region has raised a crucial question: Are existing laws failing to protect vulnerable farmers?

In a report submitted to the Kerala State Human Rights Commission (SHRC) in the first week of May 2024, District Collector Dr Renu Raj stated that over the past 15 years, more than 100 farmers in the region have taken their own lives, all linked to crippling debt.

While the commission directed the Chief Secretary to intervene in this issue and formulate and submit a plan within three months, it also calls into question the effectiveness of existing legislation designed to protect individuals from predatory lending practices.

According to a statement of Agriculture Minister P Prasad in the state Assembly in February, 42 farmers have died by suicide in the state since 2016, which was confirmed by respective district collectors as farmer deaths.

At the same time, after the second Pinarayi Vijayan government assumed office in 2021, 17 farmers committed suicide (till February 2024) though they are yet to be confirmed as farmer deaths.

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Troubling revelation

The SHRC sought a report from the district collector following a petition filed by human rights activist V Devadas.

Farmers' suicide in Kerala.

The collector stated that more than a hundred farmers died by suicide in the district in the past 15 years.

The primary cause of these suicides, as per the collector’s report, has been identified as the overwhelming burden of repaying high-interest loans taken from private moneylenders.

The report highlighted the dire situation of farmers — desperate to keep their agricultural operations afloat — who resort to borrowing from private individuals at exorbitant interest rates.

When they inevitably default on these unsustainable loans, pressure mounts on them to unbearable levels, leading many to consider suicide as their only escape.

It is learnt that the report zeroes in on private lenders as the primary culprit.

“Unlike government banks with stricter regulations, private lenders offer easy access to credit, but at a devastating cost: Exorbitant interest rates. Unable to repay the mounting debt, many farmers fall into a financial spiral, with tragic consequences,” noted Renu Raj in her report.

In short, the report is said to have surmised, the easy availability of high-interest loans from private lenders pushes them towards a breaking point.

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Remedial measures

The Collector also suggested some remedial measures to address this issue at the government level. This includes,

  • Formulating schemes by the government for granting financial assistance to farmers
  • Regulating private money lenders and institutions from levying exorbitant loan rates
  • Enhancing banking facilities for farmers
  • Protecting the price of crops
  • Measures to address the crop loss owing to climate change

Taking a strong stance, the commission directed the state Chief Secretary to formulate a comprehensive action plan within three months to prevent further farmer suicides.

This plan is expected to address the issue of predatory lending and ensure the well-being of the agricultural community. It might also cover aspects like measures to provide more accessible and affordable credit options for farmers, as well as support systems, to help those already trapped in the vicious cycle of debt.

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The critical question

But the crisis raises a crucial question: Are existing laws failing to protect vulnerable farmers?

Legislation meant to curb loan sharking appears to have significant gaps in implementation, leaving farmers exposed to financial exploitation.

The farmer community alleged a growing concern that these laws are not being enforced rigorously enough to safeguard the vulnerable farming community.

“We have the Kerala Anti-Social Activities (Prevention) Act that promises actions against loan sharks, a person who lends money for exorbitant interest in contravention of the provisions of the Kerala Money Lenders Act 1958 and the Kerala Prohibition of Charging Exorbitant Interest Act, 2012. But it’s seldom used against such persons,” a representative of Kerala Independent Farmers Association said.

According to the representative, as the Commission had directed the Chief Secretary to examine this issue, the concerned should also identify the holes in the legal framework, if any, and must plug them.

“The question is: Why are current laws failing to protect farmers? Are there weaknesses in the legislation itself, or are loopholes exploited by unscrupulous lenders? This should be answered,” added the representative.

And further stated, “Only then can a safety net be truly built for Wayanad’s farmers, and countless others across the state facing similar predatory lending practices.”

In May 2014, the then-UDF government in Kerala launched a drive against unregistered private money lenders named “Operation Kubera” which successfully rooted out numerous illegal financiers.

However, 10 years later, the initiative almost died down with occasional raids by district police chiefs, sources said.

(Edited by Muhammed Fazil)