Editorial | Time To Revisit KCC

The KCC scheme was initiated with the aim of giving farmers easy access to short-term credit. In Kashmir, it was viewed as a welcome measure to stem the reliance on private moneylenders. In the years that have passed, some gaps have emerged. Orchardists grouse that the approved sums are still inadequate for current costs such as fertilizers, pesticides, transport, and cold storage. Increases in cost of production have further expanded the gap between actual needs and loan ceilings. As has no choice but to approach more expensive informal sources of credit, negating the scheme’s very intention.

Loan Burden Keeps Rising

Horticulture in Kashmir is no small-time enterprise. Whole districts rely on it. But when nature turns against farmers, the losses mount year by year. Sudden snow in late autumn, hail in spring, and fungal diseases such as scab directly lower yields. With lower incomes, loan repayment becomes a permanent concern. Farmers claim they have to roll over debts season after season and interest keeps mounting. Numerous people opine that the KCC scheme does not consider the specific risks of horticulture, wherein a weather condition can destroy a year’s work.

Whenever natural disasters occur, the government makes announcements about relief measures. Relief packages are announced, but the actual relief that reaches farmers is usually negligible. Crop insurance still remains unavailable or ineffective. In such a situation, farmers anticipate banks and authorities to be accommodating when it comes to KCC repayments. What they get is notices and strings of pressure for clearing dues. This brings about resentment on the ground. The issue is not merely about lending loans, but about creating a farmer-friendly system that understands the volatile realities of horticulture in Kashmir.

What is required is a structural re-imagination of the way KCC loans are granted to fruit growers. Slabs of loans need to be adjusted to account for an increase in input prices. Interest rates need to be reduced, and repayment cycles synchronized with the seasonal pattern of horticultural earnings. Facilities for moratorium in years of natural disaster need to be provided. Insurance needs to be better integrated so that farmers do not have to absorb all the damage of weather-related catastrophes. Until and unless the scheme is modified to suit local requirements, it will continue to be an exercise in futility instead of actual support.

Fruit growers’ associations, civil society organizations, and local political leaders have all raised these issues consistently. According to them, unless the government intervenes with reforms, rural distress will only intensify. Already, the next generation in horticulture families is abandoning orchards, disenchanted by growing risks. This transition, if left unaddressed, will undermine the very backbone of the economy in Kashmir.

 Policy-makers need to hear from growers at the grass roots, rather than just depending upon top-down evaluation. Farmers are best aware where the shoe pinches, and they should influence whatever new support framework there is.

While banks operate under regulatory regimes, they also have a social burden. In horticulture-based areas, they cannot have a commercial approach alone. Repayment flexibility, reasonable valuation of collateral, and prompt payment of loans are the bare minimum. If banks only view farmers as defaulters, they drive them to the informal lending networks. That is undesirable for the financial system as well as the farming community. There has to be a balanced, compassionate approach.

The controversy surrounding KCC loans is not about alms. It is about protecting the life of a crucial sector that supports almost seven lakh families in Kashmir. Horticulture keeps the economy of the region going, employs people, and gives a boost to allied industries such as transport, packaging, and trade. Disregarding the hardship of growers is poor policy. Bold reforms in the KCC system are needed, supported by robust political will. Only then will Kashmiri farmers have genuine hope and not periodic debt traps.