Middlemen take big bites off char farmers’ loans

Farmers in the remote char areas have alleged that they cannot get agricultural loans without the help of middlemen, who eat up 30-40% of the loan amount as a bribe.

Aggrieved farmers from char areas in several districts including Sirajganj, Jamalpur, Rangpur and Kishoreganj told The Business Standard that banks do not accept char lands as collateral. So, they need the middlemen's help to get agricultural loans.

If farmers go to the bank through a middleman, they do not have to worry about the collateral.

As middlemen eat up a large portion of the loan, farmers are reluctant to take it. These farmers later take out loans at high interest rates from NGOs or moneylenders instead of banks.

Shah Sultan, a farmer from Merurchar union of Bakshiganj in Jamalpur, took a Tk15,000 loan with the help of a broker a few years ago.  From where he had to pay Tk7,000 to the middlemen.

Mohammad Sher Ali, one such middleman, maintains liaison with officials of banks, agriculture offices and union parishads. His lobbying helps farmers get various government assistance – including loans, free fertilizers and seeds – coming to the agriculture office.  Farmers who do not have land get loans, free seeds using his connection.

He said, "I keep in touch with officials at different offices, as this connection is useful for many village people."

Mohammad Chan Ali, a char farmer in Dewanganj of Jamalpur, said it was better to take money from moneylenders at a high interest than taking a bank loan as the cost is lower than paying middlemen.

Bakshiganj Upazila Parishad Chairman Abdur Rauf Talukder told TBS, "Farmers have some complaints about getting loans or incentives. Limited incentives may not be available to everyone. We will work together with the UNO, officials of the Department of Agricultural Extension (DAE) and different banks to solve the problems quickly."

Oxfam and Centre for Policy Dialogue (CPD), in collaboration with the European Union, recently conducted a survey on agricultural loans and services among char farmers. 

The survey report entitled "Participation of People's Institutions in Democratic Good Governance" highlights the state of farmers in Nilphamari regarding the non-availability of agricultural loans without middlemen and relevant issues.

Of the 100 farmers interviewed, 34 said they had to lobby for agricultural loans. 

Of these, 5% have admitted to money transactions in getting loans.  In 53% of the cases, it takes the help of a guarantor or a prominent person in getting bank loans.  89% of farmers do not complain about any problem related to loans, according to the survey findings.

A similar survey done on 100 farmers in Nikli Haor of Kishoreganj found that 36% farmers depended on lobbying for getting loans, while 6% admitted to taking loans with the help of middlemen.

A similar picture was found in the survey done in chars at haors in Kishoreganj, Netrokona and Sunamganj.

Oxfam in Bangladesh's Country Director Dr Dipankar Datta said, "Oxfam has been working with local partner organisations including the local government to contribute to the enhancement of government's accountability and efficiency in national policy making, appropriate financing and service delivery to boost the agricultural sector so that the grassroots farmers receive time bound support from the authority."

"To achieve that, one of key strategies for the government could be to establish more pro-people mechanisms to identify grassroots farmers and develop a central database for them," he said.

He further expressed hope that the database will help the government make proper plans and support the real farmers according to their needs and indigenous knowledge. This database will help the government share relevant information including seeds, fertiliser, high yielding variety of agricultural production, early warning etc.

"Oxfam believes that poor and marginalised people gain control over their own lives by exercising their right to political participation and access to information. This eventually helps the country to move forward towards participatory governance."

"We therefore urge the government and the duty bearers to ensure authentic and time-sensitive information on the public services available to the community people in right time through right channels including information regarding government's loans and stimulus packages for the affected farmers," Dr Datta continued.

"We have seen a vivid social audit through community engagement helps the government to ensure public services in a most effective way,'' said Dr Datta, adding that priority should be given to 'women farmers' who are the most marginalised and often forgotten.

Real farmers deprived of government incentives

Farmers in char areas grow various crops including nuts, pulses, chillies, jute, mustard, sweet potatoes, sesame, maize, maskalai amid natural disasters like floods and droughts throughout the year.  But they can't buy seeds of these products regularly. 

Meanwhile, the real farmers did not get the incentives – including free seeds and fertilisers –given by the government.

Ghorjan union is a remote char on the banks of the River Jamuna in Chauhali upazila of Sirajganj. Some farmers there claimed that people close to the members and chairman get free seeds and fertilisers. 

Even 20 % of the real farmers do not get government incentives, they added.

They said fertilisers and seeds that come as incentives are insufficient. But these incentives have not reached the real farmers properly thanks to the negligence of the agricultural officials.

Momota, a female farmer, said she did not get seeds provided by the government despite requesting a local member for that.

In these circumstances, under a project named 'Recall' being implemented by Oxfam across the country, 30 female farmers of the union formed an agricultural association, through which she got a few seeds to share among members.

Under the project, women in the char areas are being organised and encouraged in agriculture. 

Lal Banu, a member of this association, cultivated seven bighas of land with her sons and daughters. 

She said, "We have deposited Tk1.05 lakh on behalf of the association. We can't buy the tiller machine even after visiting the bank and agriculture office, causing huge problems in cultivating our lands."

These people in remote char areas are not able to buy agricultural machinery even after raising funds. The local agricultural officials are not cooperating with them in buying agricultural machinery, they alleged.

However, the government is distributing agro machinery to farmers with 50-70 % subsidy depending on the region. 

The government is distributing agricultural machinery among the farmers with 50-60% subsidy, depending on the region. Many farmers in the remote char areas alleged that they have arranged money for buying these machinery at the subsidised rate, but the local agricultural officials are not cooperating with them.

Lal Banu told TBS, "We really need a tiller machine, but we cannot buy it."

Fifty-two out of 90 farmers who were surveyed in Netrokona district and 36 out of 60 farmers in different haor areas of Sunamganj district claimed that they had no direct contact with the agriculture officials.

Mohammad Afsar Uddin, deputy assistant agriculture officer in Chowhali upazila of Sirajganj, told TBS, "We know the real farmers and want to stand by them. But there is a committee comprising union parishad members and chairman for distributing incentives, and without their recommendation it is not possible to give incentives. This creates problem in distributing incentive packages."

Regarding the allegation of not helping farmers purchase agricultural machinery, he said they are bound to cooperate with farmers. "We will take steps to assist them soon."

Char farmers struggle with adverse nature

According to the Ministry of Agriculture, there are chars in 121 upazilas of 35 districts, which is about 10% of the total land of Bangladesh. About one crore people live in these areas.

Almost 16% of the total irrigable land in five districts of Rangpur division is in char areas. Due to river erosion, dam erosion, floods, heavy rains, upstream water and hill slopes, the agricultural lands of the char areas remain underwater for about 4-5 months of the monsoon and flood season.

Visiting several char areas in different districts including Sirajganj, Jamalpur, Rangpur, our correspondents saw that there is a lack of modern irrigation equipment in those areas. This is affecting agriculture as the farmers cannot cultivate crops properly there, which is causing a decrease in the yield.

Many farmers are cultivating Boro paddy on a limited scale due to inadequacy of irrigation equipment. Many farmers, who do not have the needed machinery, sow jute seeds long after preparing the land as they have to wait for rain.

Mojibar Rahman, a farmer from Hatgurjan area of Sirajganj, told TBS, "I have cultivated Irri paddy on four bighas of land, but I cannot irrigate it sufficiently. We need a lot of water. We also cannot cultivate jute due to the lack of water."

The farmers said they have to give three to four times more water in the farmlands in chars compared to the plains. They cannot cultivate crops without agricultural machinery despite having farmlands.

Government to take project to expand agriculture in chars

To achieve the Sustainable Development Goals (SDGs), the government needs to end hunger, improve food security and improve nutrition by increasing production and productivity in these backward areas. At the same time, it has to expand sustainable agriculture to achieve the SDGs.

The Ministry of Agriculture is going to take up a project to develop agriculture in the char areas and increase the cultivation of crops suitable for the region. The Department of Agricultural Extension (DAE) will implement the project.

The project proposal titled "Sustainable Agriculture Development through Expansion of Modern Technology Suitable for Char Areas in Bangladesh" has recently been sent to the Ministry of Agriculture. The DAE will bring the upazilas with more than 1,000 hectares of char land under the project involving Tk284 crore. The project will be implemented in five years.

The project will facilitate the selection of suitable crops, easy access to irrigation pumps, solar pumps, pipes and other irrigation equipment, expansion of irrigation system and management of irrigation water, crop diversification, setting up agricultural product storage, ensuring market value of produce, preservation of crops during natural disasters.

It will also realise various schemes including construction of sheds for conservation, production and marketing of different types of organic manure, and supply of quality paddy seeds and hybrid seeds.

DAE Director General Mohammad Asadullah told TBS, "Extensive development of agriculture will be possible through this project. Emphasis will be given on irrigation, farm layout, availability of quality seeds, and marketing of products."

"Increasing productivity through developing agriculture in char areas will have a significant impact on national food security, and through this we will be able to fulfill the SDG 1," he added.

In collaboration with OXFAM