Lok Satta seeks pledge loans to farmers

The Lok Satta Party today expressed the fear that paddy growers faced the prospect of exploitation by middlemen and rice millers as the Food Corporation of India with its warehouses overflowing was in no position to take up paddy/rice procurement immediately after the crop comes into the market in about a month.

Talking to the media, State party Secretary P. Bhaskara Rao and spokesman V. Laxman Balaji said that small and marginal farmers traditionally sold their crop immediately after harvest as they cannot afford to wait for a better price.

To save such farmers from exploitation by rice millers and their middlemen, the Lok Satta Party suggested that banks give pledge loans to farmers on their stocks. Such paddy could be sealed at the farmer’s residence itself or stored at a common point in a village and taken as mortgage, they suggested. Such farmers could sell their crop when they received a better price in the market and clear their pledge loans.

The party also suggested that grain banks be established in villages under the control of local governments so that money need not be wasted on transport of rice/paddy procured in rural to urban areas where the warehouses are located and back to villages for distribution of rice through the public distribution system. Such a decentralized system of storage and distribution would result in enormous savings for the public exchequer and eliminate wastage and corruption prevalent in a centralized system.