Tobacco grower loans questioned

India’s Union government is being urged to scale back the agricultural loans issued to flue-cured tobacco growers, according to a story in the Hindu relayed by the TMA.

Vasanthkumar Mysoremath, convener of the Anti-Tobacco Forum in the city of Mysuru (Mysore), said the government needed to act on the loans if it was serious about meeting its obligations under the World Health Organization’s Framework Convention on Tobacco Control to reduce tobacco cultivation by 80 percent by 2020.

The State Bank of Mysore (SBM) said about 40 percent of total agricultural credit went to tobacco farmers every year, though it wasn’t clear whether these loans were used entirely for the cultivation of tobacco.

It is estimated that about 75,000-80,000 famers produce flue-cured tobacco on about 80,000 acres of land in the Mysuru District.

Various public sector banks, regional rural banks and co-operative banks issued loans worth about Rs12 billion (US$ 181.2 million) to local tobacco growers during the 2015-16 season.

K.N. Shivalingaiah, manager at SBM, said agricultural loans came under the priority sector in the District Credit Plan and that lending to tobacco farmers accounted for more than 40 percent of the total crop loan in the district.

The tobacco loans were low-risk, with repayment assured under a Memorandum of Understanding signed between the lending banks and the Tobacco Board.

The lending policies of the public sector financial institutions “should also reflect the larger national policies of the Union government,” Mysoremath added.