Loan Waivers Fail Vidarbha Farmers as Debt Recovery and Land Seizures Rise

thenewsdirt
May 30
7 min read

Farmers in Vidarbha have faced unrelenting challenges in recent years, battling financial strain despite government loan waiver schemes. The announcements of debt relief in 2017 and 2019 promised a lifeline to struggling cultivators.

Yet, what has unfolded is a persistent cycle of unfulfilled assurances and growing debt.

Across Yavatmal, Wardha, Akola, Buldhana, and other districts, farmers have been issued recovery notices, faced symbolic land possessions, and continued to be denied access to fresh loans.

Loan waivers that were intended to ease their burden have, in reality, deepened their distress.

Debt Recovery Actions and Government Failure

In 2017, Maharashtra introduced a farm loan waiver scheme for loans up to ₹1.5 lakh, later expanding it in 2019 to cover loans up to ₹2 lakh. The objective was to provide relief to small and marginal farmers.

However, the delivery of these promises has been marred by significant delays in reimbursement to banks.

In the Yavatmal district, 52,000 farmer accounts were listed under the loan waiver scheme. Yet, these accounts have pending dues amounting to ₹900 crore, including interest.

The Yavatmal District Central Cooperative Bank, unable to recover the funds from the state, has moved towards recovery actions by issuing symbolic possession notices on farmers’ lands.

Farmers believed their loans had been waived, only to be confronted with legal notices declaring the banks’ claim over their farmland. In one documented case, a farmer from Yavatmal who had borrowed ₹3 lakh in 2012 discovered that his debt had escalated to ₹8 lakh due to accumulated interest.

Despite being eligible under the loan waiver scheme, he received a recovery notice, adding to the financial pressure already worsened by repeated crop failures and market fluctuations.

In Wardha, Akola, and Buldhana districts, similar stories emerged. Farmers holding loan waiver certificates were unable to access new crop loans because banks had not received confirmation of reimbursement from the government.

This situation has left many cultivators trapped, unable to repay old loans and simultaneously blocked from securing new ones necessary for seasonal sowing.

Banks, facing liquidity shortages due to the lack of state payments, have turned to aggressive recovery tactics.

In Yavatmal alone, 29 farmers have received symbolic possession notices. These notices publicly declare the bank’s claim to farmers’ fields, warning of potential land auctions if the debts remain unpaid.

The move has added a new layer of anxiety for farmers who had trusted the government’s announcements.

In Wardha district, farmers have reported being excluded from new credit disbursement. One septuagenarian farmer expressed his frustration, highlighting that despite being listed under the loan waiver scheme, his loan remained marked as pending in the bank’s records.

Denied access to formal credit, he, like many others, has been forced to approach private moneylenders at high-interest rates to fund his agricultural activities.

In addition to this, the Yavatmal District Central Cooperative Bank reported that around ₹450 crore in principal amounts and ₹150 crore in interest subsidies were pending from the state government.

With no funds forthcoming, the bank had little choice but to proceed with recovery actions, even if it meant acting against farmers officially declared debt-free.

Across Vidarbha, cultivators have found themselves trapped. Cooperative and nationalised banks, awaiting state reimbursements, treated waived loans as recoverable debts. This not only denied farmers fresh credit but also led to a situation where symbolic possession and potential auctions loomed large over farmland, the very lifeline of these rural families.

Farmer Testimonies and Organised Protests

The discontent among farmers has not gone unnoticed. Kishore Tiwari, associated with the Vidarbha Jan Andolan Samiti, pointed to a lack of political will and administrative efficiency as reasons behind the loan waiver failures.

He stated that while schemes were declared, they were not implemented in a manner that could provide tangible relief to those who needed it most.

Farmers have consistently spoken about the gap between promise and delivery. In Yavatmal, a farmer noted that his application under the loan waiver scheme was approved, yet his outstanding loan continued to block his access to new credit.

As sowing seasons came and went, the inability to secure financing forced him and many others to reduce their agricultural activities or turn to informal sources for funding.

In Wardha, another farmer recounted his experience of approaching the bank for a new crop loan, only to be told that fresh credit would not be issued until the remaining amount on his previous loan was cleared.

Despite having a loan waiver certificate, the unresolved balance effectively locked him out of formal credit systems.

Farmers' organisations have taken a stand against what they describe as betrayal. The Maharashtra Kisan Sabha staged protests, burning recovery notices in a symbolic gesture of defiance. Their actions were not limited to public demonstrations.

They criticised the cycle of loan waivers being announced and then failing to deliver substantive results. Leaders pointed out that despite multiple schemes, the core issues of agricultural distress remained unaddressed, and the need for bailouts persisted.

Across Vidarbha, similar sentiments have been echoed. Farmers highlighted how successive loan waiver programs were rolled out with media attention but failed in execution.

The burden of pending debts and the denial of fresh credit contributed to a situation where farming became increasingly unviable for many small and marginal cultivators.

In particular, farmers from Akola and Buldhana have expressed their frustration.

They spoke of how their eligibility for the loan waiver was recognised on paper, yet the banks continued to demand repayments. For many, the disappointment of seeing possession notices posted on their fields, despite government promises of debt forgiveness, only deepened their disillusionment with official programs.

Structural Failures in Loan Waiver Implementation

The core issue lies in the gap between policy declaration and implementation. While the government announced waivers, it failed to release the necessary funds to banks. This failure has had a cascading effect.

Banks, deprived of liquidity, have been unable to provide fresh loans to farmers.

Instead, they have turned towards recovery mechanisms, issuing notices and seizing symbolic possession of lands.

The consequences are evident in Vidarbha’s crop credit disbursement figures. In 2020, only 61 percent of the targeted crop loans were disbursed in Vidarbha, compared to the statewide average of 64 percent. This shortfall indicates a broader credit crisis.

Farmers unable to access formal loans have no alternative but to approach informal moneylenders, often at exploitative interest rates, thereby deepening their financial woes.

The design of the loan waiver schemes also contributed to the exclusion of many farmers. Only formal loans up to ₹2 lakh were covered, leaving out a significant portion of marginal farmers and tenant cultivators who rely on informal credit or who have larger debts due to accumulated borrowings.

Of the nearly nine million small and marginal farmers with outstanding loans, fewer than half ultimately benefited from the 2017 waiver scheme.

Administrative inefficiencies compounded the problem. In 2025, it was reported that more than 6.5 lakh farmers' applications for the 2017 loan waiver scheme were lost or corrupted during a data migration exercise. This technical failure effectively barred these farmers from receiving any benefits, not only for the 2017 scheme but for subsequent waivers as well.

The impact of these failures is not merely financial. The human cost is reflected in the alarming suicide rates among farmers in Vidarbha. In 2023 alone, 1,439 farmers took their own lives in the region, the highest number recorded in Maharashtra. These figures point to a persistent agrarian crisis that has remained unresolved despite the announcement of multiple debt relief measures.

The waiver schemes, while politically expedient, have not succeeded in providing meaningful relief to farmers on the ground. Instead, they have created a situation where symbolic gestures of debt forgiveness coexist with actual recovery actions, further complicating the lives of already distressed cultivators.

Persistent Agrarian Distress in Vidarbha

The situation in Vidarbha offers a stark illustration of the disconnect between government announcements and realities on the ground. Farmers who were led to believe that their debts were forgiven have found themselves facing recovery notices and land possession actions.

Cooperative banks, left without the promised reimbursements, have pursued farmers for outstanding dues, undermining the very objective of the loan waiver schemes.

The consequences have been severe. With old debts unresolved and new credit blocked, farmers have been pushed towards informal lending networks, often at punitive interest rates. The lack of access to affordable credit has crippled agricultural activity, forcing many to reduce cultivation or abandon it altogether.

The data loss affecting 6.5 lakh farmers compounded the exclusion. These farmers, already struggling, found themselves left out of the waiver schemes entirely due to technical errors.

Without formal recognition of their debts, they became invisible to the mechanisms of relief, yet they remained fully exposed to recovery proceedings.

Across Vidarbha, the promise of loan waivers has not translated into relief. Instead, it has added another layer of uncertainty and anxiety for farmers. The persistent high suicide rates highlight the depth of the agrarian distress.

Despite multiple interventions, the structural issues plaguing agriculture in the region, from credit access to market volatility, remain largely unaddressed.

The experience of Vidarbha’s farmers with loan waivers underscores the importance of not only announcing relief measures but ensuring their timely and effective implementation. Without this, policy interventions risk becoming symbolic gestures that fail to alleviate the real and pressing challenges faced by farmers across the region.