The Lede
Time To End Kudumbashree Loan Farming?
Photo credit: Jeff Joseph

Time To End Kudumbashree Loan Farming?

Two all-women collectives are facing a litmus test of sorts. Only one seems likely to pull through. The Lede finds out why.

Jeff Joseph

Jeff Joseph

A quiet revolution had been taking shape in Kerala for some time. Women were taking to farming like never before.

Aided by the support system extended by Kudumbashree, one of the most prominent self-help groups in India, women undertaking farming had been a rising phenomenon statewide.

More than 38,000 hectares was put under cultivation by the rural landless women of Kerala against a set target of 24,000 hectares under the Mahila Kisan Sashaktikaran Pariyojana (MKSP).

With the floods followed by erratic rains wreaking havoc in recent years, crop loss has been inevitable.

But with many women farmers deeply enmeshed in a cycle of credit that seem to be independent of cropping outcomes, the area under cultivation doesn’t quite capture the story within.

The JLGs: Farming To Avail Loans

“The field lay flooded for four days and all the tapioca tubers went to rot,” says Sajana Shivadasan, a member of an all women Joint Liability Group (JLG). This is a group of six women undertaking collective farming.

“Had we planted earlier, we would have harvested before the flooding,” she regrets.

By the side of a paddy field which lay unused, Mini Biju, a NREGA (National Rural Employment Guarantee Scheme) mate who is also a member of the JLG, oversees other NREGA workers who prepare land for paddy in ankle deep waters.

The paddy for which the land is being prepared is the group’s latest crop. “It is already late for planting as we couldn’t get the NREGA workers from the panchayat,” she says.

It was also the reason their previous crop, an acre of tapioca, ended in a complete loss.

Mini who is part of a JLG has along with the other five availed a Rs 3 lakh loan for agriculture. The loan, given through Kudumbashree, is part of the bank linkage program.

Through this scheme, JLGs can avail agricultural loans up to Rs 3 lakhs without collateral at an interest rate of 4% for farming on leased lands, provided the loans are paid back in a year.

This has been the real secret behind the sprouting of farming among women’s groups in Kerala.

Consequently, bank linked loans of Kudumbashree almost doubled in 2018-2019 to reach Rs 4131.91 crore.

“We save money by using the free NREGA labor and using unused lands”, says Mini
“We save money by using the free NREGA labor and using unused lands”, says Mini
Photo credit: Jeff Joseph

“We won’t get free labour if we are to farm on the same plot next year,” says Sajana Shivadasan, member of a JLG.

The unused lands come cheap as the owners are happy to see their lands being put to use. And without watering, input costs are low.

NREGA labour is provided by the panchayat for those undertaking cultivation on fallow lands as a measure to promote extension of agriculture.

But given that the JLGs avail loans to cover all expenses, the dependence on free NREGA labor is unwarranted as is the loan itself in most cases.

Rs 3 Lakh Loan But Input Cost Of Rs 1000

“We have to pay Rs 20 per cent or Rs 2000 per acre as lease amount for the land and have spent Rs 1,000 for fertilizers,” says a member.

As for the tapioca stubs - “we collected them from other farmers for free.”

Given the disproportionate nature of the loan availed - Rs 3 lakh - versus the actual expenses incurred - Rs 1000 - sustainability of the setting seem to be under a question mark.

The members are evasive at first. But when pressed, they explain the scheme. “We divide the loan amount amongst ourselves and undertake farming using our own money,” says one member.

“Usually the loan money comes late,” justifies another member.

With six members sharing Rs 3 lakh, the split comes to a liability of Rs 50,000 per head, a smaller amount. And herein begins the problem.

The loan money is then used for meeting “needs like buying gold or things like that.”

As for recovering the loan amount from farming, even in a successful crop season, the feat appears almost impossible.

“One plant can fetch an average of 5 kgs and with close to 1000 plants we have planted, we can get 5000 kgs. With market rates at near Rs 30 we can get about Rs 25 per kg,” says Mini.

Even in these best case scenarios, the outcome is a total recovery of Rs 1.25 lakh which leaves an additional debt of Rs 1.75 lakh to be paid back.

“We pay back on time by pawning jewelry or by means of borrowing so as to avail the 4% interest benefit,” says a group member. “And we take a new loan to offset the old one and take back the pawned jewelries and pay back the borrowings.”

In effect, they are in the midst of a cycle of recycling debt.

“Men who used to make fun of Kudumbashree women earlier now force women to form JLGs,” says Sajana Shivadasan 
“Men who used to make fun of Kudumbashree women earlier now force women to form JLGs,” says Sajana Shivadasan 
Photo credit: Jeff Joseph

The calculations which seem straight out of a bogus pyramid scheme is fairly common practice and money farming, the façade of farming for availing loan money, is even seen as a legitimate enough exercise for such groups to be openly talking about them.

“They form the majority,” says Mini Mohan, a social activist who has studied Kudumbashree networks at length talking about the JLGs which undertake farming for money.

“98% of them are like this. Maybe 2% of them do farming for what it is worth,” she adds.

But Mini Biju and her JLG members are unaware of the reality. When asked about the crop loss they have incurred this year they are quick to assess - “We haven’t lost any money. Only our efforts have been laid to waste.” The Rs 50,000 they each took as debt is forgotten.

“They never realise the debt they are living under as they keep juggling debt with no real incomes,” says Mini Mohan.

As for what the group plans to do next - “We will renew the loan and try replanting again maybe,” says a group member.

“Easy loan renewals mean that those availing these loans can get away with practically paying just the 4% yearly interest,” says Mini Mohan. “This creates a group which is living on credit perpetually without them realising it.”

“The standard of living goes up for sure, but they are not sustainable,” she says.

The case of Parijatham Haritha Sena is a study in contrast.

An Alternative: Parijatham Haritha Sena

Formed in 2011, as part of the Food Security Army, Parijatham Haritha Sena has ten members today.

An initiative which started with a chance attendance of an agro-machinery training session conducted by the Krishi Bhavan, the group grew in strength with time.

“Five of us got training initially,” says Sunitha Shibhu.

“We were the only women in the batch of 90 cadets”, says Sunitha Shibhu
“We were the only women in the batch of 90 cadets”, says Sunitha Shibhu
Photo credit: Jeff Joseph

“We hadn’t even known what it was for until the classes started,” she adds.

The Krishi Bhavan wanted members to be sent for training and with no one showing interest, Sunitha was persuaded, along with the other four - Sangeetha, Ammukutty, Eliamma and Vatsala.

The accidental enrolment got them hooked. “Later, we attended Jaikumaran sir’s Food Security Army classes too,” she says.

Dr U Jaikumaran, then part of the Kerala Agricultural University, had been trying to raise a Food Security Army, by giving gender neutral training, to solve the lack of skilled agricultural labour and their timely availability.

The training prepared cadets to take up agricultural works on contract. The five women returned confident.

The First Contract

“We had never been agricultural workers before that,” says Sunitha. “I used to help out in a tailor shop. That was earning me Rs 60 a day. It was cut piece rates of Rs 5 per blouse or thereabouts,” she recalls. “It was a pittance.”

Sangeetha Manikuttan, another founding member, was alien to agriculture too.

“Back then I used to go for NREGA works mostly,” says Sangeetha. “And they were sporadic. Other times I just sat at home doing nothing.”

“We had no experience and naturally, the first work we took up proved a financial disaster.”

“We got Rs 110 per person after all the hard work. Transportation of machinery cost us dearly,” says Sangeetha. “But we persevered.”

“Soon we learned how to quote rates, how to negotiate and most importantly, how to get work done efficiently. Earlier, our machines would get stuck in the mud or waterlogged areas when tilling the fields and we would have to hire help from men to recover them,” recalls Sangeetha.

“Now we do all that ourselves. Moreover now our machines never get stuck.”

“All of us know how to drive tractors and all the other farm machinery by ourselves,” claims Sangeetha
“All of us know how to drive tractors and all the other farm machinery by ourselves,” claims Sangeetha
Photo credit: Jeff Joseph

“These were jobs which had previously been reserved for men and men alone were thought to be capable of doing it. We have been doing them for close to ten years now. That is our confidence,” she says beaming with pride.

Eliamma Pathrose, the eldest member of the collective nearing her seventies, had been an agricultural labourer in her younger days and later worked as a help in an Oushadhi outlet for years, selling ayurvedic medicines and preparations.

Her previous experience as a farm hand was to prove beneficial for the group.

The Farming Experiment & Loans

The group soon took land on lease and started cultivation of rice on a 6-acre piece of land that had previously lain unused.

The labour force raised to help farmers was transforming into farmers themselves.

“We did okay,” says Sangeetha referring to the first time they cultivated rice.

“We didn’t make much profit and all, but we didn’t incur big losses either.”

They were assisted by the institutional support provided by Kudumbashree, the women’s collective SHG where the group had registered themselves as a Joint Liability Group (JLG) like numerous others.

“We had availed a loan of Rs 60,000 then,” says Sangeetha.

“Most of the younger generation doesn’t know how to boil husked rice,” says Eliamma, referring to group’s younger members
“Most of the younger generation doesn’t know how to boil husked rice,” says Eliamma, referring to group’s younger members
Photo credit: Jeff Joseph

The one-time adventure of Parijatham soon turned into a regular activity and farming came to be one of the mainstays.

“Two years back we cultivated turmeric,” says Eliamma. “We made good profits then. We harvested close to 7000 kgs of turmeric after sowing 1000 kgs. It earned us close to Rs 2.5 lakh.”

The groups had begun to think beyond rice and turmeric was a natural extension given its price and the type of land it needed.

“But last year was a disaster,” say group members in unison. Though the fields were not affected by flood directly, crops were severely affected by drought. “We incurred heavy loss,” says Eliamma.

“With all rain concentrated over a few days, crops were left drying in other months,” she explains.

The group had availed loans worth Rs 3 lakh from the society through JLG and the liability has hung over their heads since.

“We don’t use pesticides as we want good food without poison for ourselves,” says Sangeetha Manikuttan
“We don’t use pesticides as we want good food without poison for ourselves,” says Sangeetha Manikuttan
Photo credit: Jeff Joseph

“We could get an output of just 1450 kgs last year for which we got a total of Rs 64,000,” says Sangeetha. “We are trying again this year.”

The group has taken close to 3 acres of land on lease where they planted Prathibha variety of Turmeric. “It has higher percentage of Curcumin,” they reason.

One of the main reasons why the group can afford to continue farming is that they have been selected by the Kodakara Block Panchayat in 2016 to be part of the Agro-Service Centre, which offers them a regular source of income.

The Agro-Service Centre

“The aim of raising the Food Security Army was to put in place an infrastructure which will be ready to help the farmers,” says Dr U Jaikumaran, retired Professor of Agronomy and Head Agricultural Research Station, Mannuthy whose idea it was.

“The most important reason for fall in farming in Kerala was the absence of ready labour and their exorbitant rates. The training we give is not gender centric and is modeled on the military and apart from skill development we also focus on confidence building exercises, physical exercises and drills to train them in multi-tasking,” he adds.

Started in 2008, the Food Security Army training program, an initiative of the Government of Kerala, aimed at creation of Karshika Karma Sena in every panchayat and Agro-Service Centres at every block panchayat, ready to undertake agricultural services at the request of farmers, for a cost.

The services include use of agro-machinery for preparation of land, tilling, planting and transplanting right up to harvesting.

“The aim really is to have all services needed for agriculture within a panchayat itself,” says Dr U Jaikumaran
“The aim really is to have all services needed for agriculture within a panchayat itself,” says Dr U Jaikumaran
Photo credit: Jeff Joseph

“Presently there are 302 panchayats with Karshika Karma Sena and 98 blocks with Agro-Service Centres in Kerala,” he says.

The Agro-Service Centres are given seed money of Rs 32 lakh each to buy equipments and farm machinery.

“Each centre is envisioned to become a start-up in itself,” says Dr Jaikumaran.

And it was one of these Agro-Service Centres that Parijatham group came to be selected for. The group was assigned a facilitator to help them prepare a viable business plan.

With the money, they bought more machinery and took up other works as well.

“We undertake contract farm works as well as grow-bag preparations for distribution in the panchayat,” says Kuttappan, the facilitator of the group and a retired agriculture officer.

“We have also taken land on lease and a green house has been set up,” says Kuttappan
“We have also taken land on lease and a green house has been set up,” says Kuttappan
Photo credit: Jeff Joseph

“All the money earned under the agro-service centre is pooled together and we draw a monthly salary now,” says Jyothi Joshi, a member of the group.

“From our daily wage of Rs 650, Rs 50 is held by the agro-service centre for our health and pension benefits and Rs 600 goes into our account,” says Jyothi.

“The rest is saved in the centre’s account.”

The facilitator who draws a salary from the pooled money arranges the attendance rolls and prepares business plans for the centre.

“Salary comes directly into our accounts every month,” says Sangeetha.

The regular salary makes them less dependent on the farming they undertake on the side and enables them to repay loans from their salary.

“This time we are farming under the agro-service centre as one of its activities,” says Sunitha.

It is a luxury that the Parijatham group has by virtue of their unique arrangement within the agro-service centre.

“The centre has an excess corpus fund saved as surplus which is now more than Rs 16 lakh,” says Sunitha.

“We don’t have to take loans for farming anymore,” says Sunitha Shibhu  
“We don’t have to take loans for farming anymore,” says Sunitha Shibhu  
Photo credit: Jeff Joseph

But this is not the case with other JLG farmers under Kudumbashree who undertake farming with one single purpose - to avail loan money to repay previous loans.

Kudumbashree Bubble About To Burst?

“There seems to be no end in sight to the credit cycle,” says Mini Mohan, a social activist who has studied Kudumbashree models in depth.

Area under cultivation has been increasing as have the total loans disbursed, signs held up by Kudumbashree as proof of its excellence.

While everything looks good on paper, the problem begins with the fact that on ground, things look like they could go wrong any time.

“Very rarely does Kudumbashree-led farming lead to sustainable growth models,” says Mini. “A majority of JLGs are getting trapped under additional loans. I see it as a burden more than an enabler.”

“Those who are part of JLGs don’t know their real situation. They arrange from here and there and don’t think about sustainability. It is an economy running on debt,” she says.

“The best model of SHGs is Bangladesh where only one SHG exists whereas in Kerala, we have multiple SHGs. One may be a member of Panchami, Jayashree, Kudumbashree or SNDP SHGs, among many others, all at once, and be taking loans and juggling them.”

“Nobody has any idea as to the total liabilities. One could also be a part of multiple JLGs and there is no way to control those either.”

“The other question is whether we empowered women to push men to laziness? The credit shouldn’t have been so easily available. There should have been filters and qualifiers. While the haste is to make everything look like a gender revolution the fact is many men push women to join JLGs just to avail easy loans,” adds Mini Mohan.

“The family finance has come to run on a bogus economy. With JLGs being promoted by lead banks as more reliable, the assumption is that all is well. There are no studies being done to assess the qualitative outcomes of lending.

It is a loss making venture which results in dead investments like gold and the losses getting carried over every year. But the positive stories are highlighted and naturally all the dirt remains hidden,” she adds.

“The contradiction is that farmers who own land are not given loans to do farming when these JLGs are being given loans without collaterals to no end.”

In the evaluation of a senior government functionary working with the Agricultural Department - “Kudumbashree doesn’t have the technical teams to provide inputs or equip their so called farmers.”

He chose not to be identified as working under a different department, he says it is best he does not comment on the working of a celebrated experiment.

As for farming being undertaken by Kudumbashree JLGs he says - “It is akin to a surgery meant to be performed by a doctor being performed by an attender with no training.”

“Kudumbashree is neither equipped nor does it have the capability to undertake farming nor the management systems to oversee farming,” he adds.

While Kudumbashree has successfully increased visibility of women in agriculture, by making them indebted, it has neither presented a viable livelihood opportunity nor ensured a sustainable model.

“It is a balloon which is kept afloat by the government funding pumping it again and again,” says Mini. “It will collapse under its own weight the moment government stops pumping in money.”

“Given today’s general economic scenario time isn’t far when central and state governments back out, it will be disastrous if the present credit system is withdrawn or stopped,” she says.

“Unless corrective steps are taken before that, we may be in for a really hard landing,” she warns.