How The Adivasi Farmers In Odisha Are Looted

Malkangiri is the southernmost district of Odisha, which is known to be a mini tribal India, where 61 tribes have found shelter. While the media enthusiastically reports the violence among Naxalites and security forces in Malkangiri, it hardly sheds any light on the continuously deteriorating economic condition of the tribals. The article intends to bring to light the ‘looting’ that has been taking place in Malkangiri with its Adivasi farmers.

Loans: The First Stage Of Exploitation

There are nicely painted banks in different corners of Malkangiri but the poor and marginalised Adivasi farmers could hardly gain an entry to these spaces where Babus with iron-pressed formal dresses work to serve the needy.

Our people are illiterate and the set-up of the banks scares them,” says a group of young farmers from the district. But that’s not the only reason why banks in rural Odisha are inaccessible to farmers.

In our area, even if the banks are working, there is gross ‘herpher’ in the banks. In a farm loan of 50,000, we have to give 10,000 as a bribe,” says Krushna Madkami, a farmer from Malkangiri district. This doesn’t mean that the bribe percentage would be fixed for everyone. The more financially illiterate you are, the greater is the percentage of the bribe. In such a situation, the banks turn out to be traps which would offer you money with a bit of harshness, unlike the rich moneylender of the town who would lend you money with words sweeter than honey.

Along with that, it becomes difficult to avail an agricultural loan due to the legal complexities with the patta of the land which, in case of the Adivasi farmers of Odisha, are in their grandfather’s or great-grandfather’s name. That means a single patta made in the 1940s’ or 50s’, having 150 acres of land recorded in it, has more than 40 stakeholders. Even if twenty members of the family, scattered across different villages, want to avail loans, they have to show the same patta in a bank. “There is always a dominant big brother in every family who keeps the land patta with him and gives it to nobody in times of need,” says Sunadhar Podiami. This eventually excludes a large fraction of the Adivasi population of the district from getting farm loans.

Although LAMPs (Large Scale Multi-Purpose Society) provide agricultural loans in Odisha with only 5 % interest rate (with 4 % subsidy from the state government), this money gets spent by farmers often in one season. And once you fail to repay it, you can’t avail the loan again. Hence, these farmers either have to die of hunger or avail a loan from the local moneylender.

Feudalism In A Different Colour

There is hardly a single Adivasi in Malkangiri who is either a moneylender or a pesticide dealer. It is the people from Andhra Pradesh, coastal Odisha, Marwad and Bengali refugees from erstwhile East Pakistan who run this business. These moneylenders occupy both sides of the main roads of every Panchayat or small town.

Moneylenders in Malkangiri, along with charging a higher rate of interest, have started a new trend where an unofficial contract is made between the farmers and the moneylenders. According to this contract, if a farmer borrows money from a particular moneylender to grow paddy, after the production, they can only sell their paddy to the same moneylender, no matter what. The price of the paddy at which the farmer would sell it to the moneylender also has to be fixed at the time of the contract. These kinds of contracts exist across the subcontinent, with little or no changes in terms and conditions.

There are two fundamental problems with such a kind of agricultural system.  Firstly, the price at which the moneylenders buy crops from the farmer is very low. For example, if the MSP (Minimum Support Price) in the current year for paddy is ₹1550 per quintal, the price fixed at which the moneylender buys it from the farmer ranges between ₹800 and ₹950. Even if the MSP increases subsequently and reaches ₹1700 or ₹1800, at which the government buys paddy through organising co-operative markets, a large number of farmers who borrow money from the local moneylenders are excluded from it.

Secondly, in cases of crop failure for natural calamities or other reasons, the government waives the agricultural loans taken by farmers from banks and cooperative societies. As a loan-waiver obviously doesn’t apply to informal loans. So, again a huge number of Adivasi farmers are excluded from recovering their losses.

The Nexus At The Market

The mill owner rejects 15 kilos of paddy in a quintal. If this is the case, how are we going to survive?” says Jhinna Madkami* of Korkunda block.

The central government has set ₹1550 as the ‘Minimum Support Price’ (MSP) for a quintal of paddy. This means that no buyers can buy paddy for less than this price from a farmer. To implement this, the state government has set up local ‘Mandis’ or ‘Paddy procurement centres’ (PPC) where registered farmers can sell their paddy and get their due benefit from the government through ‘Direct Benefit Transfer’ (DBT) but the Govt. Of Odisha has also set some norms to buy the paddy from farmers and thus have formulated a process for quality check. Many farmers in Odisha have complained that the PPCs reject their crops for various reasons.

The reason for this rejection is something very different. The paddy that is bought from farmers in PPCs is sent to a local mill to refine the paddy into rice particles. The mill owners are also expected by the government to provide a certain amount of rice per quintal of paddy and hence, the mill owners ‘illegally’ become a part of the entire process of quality checks. They are not entitled to visit Mandis for quality-checks. It’s the Regulatory Marketing committee which is supposed to conduct it.

Because equipment for quality checks are not available at the PPCs, the mill-owners reject 10-15 kgs of paddy/ quintal of the farmers with excuses of the paddy being full of moisture, sand and particles. The farmers face a great loss in the process. Along with it, as the payment comes to the passbook after a few days, the farmers prefer to sell it to the local businessman, who pays approximately ₹1300 per quintal and pays instant cash.

The businessmen of Malkangiri sell these crops in the neighbouring state of Chhattisgarh which pays ₹300 bonus for a quintal of paddy along with the MSP totalling to ₹1850/quintal. While the Adivasi farmers use their labour to produce these crops, it’s the upper-caste businessmen, moneylenders and mill owners who make the maximum profit.


The author is a Bachelors’ student at the Tata Institute of Social Sciences, Hyderabad. The data for the above article was collected during the author’s research fieldwork in Malkangiri, Odisha.