[ Extracts from the Famine Commission's Report, 1901, Part III, 



pp. 97102.'] 



SECTION IV AGRICULTURAL BANKS. 



288. We attach the highest importance to the establishment of 

 some organization or method whereby cultivators may obtain, without 

 paying usurious rates of interest, and without being given undue 

 facilities for incurring debt, the advances necessary for carrying on 

 their business. Agriculture, like other industries is supported on 

 credit. "The sowkar is as essential in the village as the ploughman," 

 said the Secretary of State in reviewing the Report of the Deccan 

 Riots Commission and the statement is true in existing circumstances. 

 But, owing to causes, which it would be tedious to trace, the sowkar 

 or bania has, from being a help to agriculture, become, in some 

 places, an incubus upon it. The usurious rates of interest that he 

 charges and the unfair advantage that he takes of the cultivators' 

 necessities and ignorance have, over large areas, placed a burden of 

 indebtedness on the cultivator which he cannot bear. Passed on from 

 father to son, and continually swollen in the process by compound 

 interest, this burden of indebtedness has become hereditary and 

 retains the cultivating classes in poverty, from which there is no 

 escape, that we can perceive, except through state assistance or the 

 discovery of some other means by which the cultivator may get, on 

 easier terms, the accommodation that he needs. But even the fuller 

 measure of State aid in the shape of takavi loans, which we shall 

 recommend, will go but a small way towards removing the difficulties 

 of the whole class. Government cannot possibly finance all the 

 cultivators of a district, still less of a province. In the establishment 

 of Mutual Credit Associations lies a large hope for the future of 

 agriculture in India ; and from the enquiries we have made there is 

 reason to believe that, if taken up and pressed with patience and 

 energy, such associations may be successfully worked. 



289. This question is, we believe, to come shortly under the 

 consideration of the Government of India, but it is necessary that 

 we should call attention to its importance here. The subject was 

 broached by us in all the provinces that we visited, and was 

 * everywhere regarded with interest. Moreover, as the Government 

 of the North-Western Provinces and Oudh has actually taken steps 

 to put the principles of rural co-operative credit into practice, we 



