Farmers pawning their gold for larger loans than needed

This ultimately leads to diversion of funds and consequently, high incidence of indebtedness among the farmers

THE REPORT

NEWDELHI: Farmers may be mortgaging family gold to take on larger agricultural loans than they actually need to meet cultivation costs, according to a report by the Reserve Bank of India (RBI), which has cautioned against a debt problem in the farming community.

The September report by RBI’S “internal working group to review agricultural credit” said it was likely that “farmers are availing agricultural loans against gold as collateral”, stating that this was “a matter of concern”.

High indebtedness has long plagued the country’s farmers and is said to be one of the reasons for suicides among the farm community. Rough patches in the agriculture sector have often necessitated large, populist farm loan waivers, which limit the ability of governments to make growth-propelling investment in the sector.

“The predominance of agricultural loan against gold as collateral is a matter of concern as the quantum of loan must have been de-linked from the scale of finance,” the report stated. The scale of finance is an economic jargon for the actual costs of culNEW DELHI: Interpol, acting on India’s request, issued so-called “red notices” against at least eight Khalistani militants abroad, including Khalistan Liberation Force (KLF) leader Harmeet Singh in Pakistan.