Pigeon peas farmers fail to repay loans over India ban

Newala/Tunduru. Pigeon pea farmers and traders may not be able to repay loans following a drastic fall in the price of the crop.

The price drop is attributed to a decision by the main importer, India, to restrict imports from Tanzania, The Citizen can report.

Stable prices of the pigeon peas lured farmers into borrowing to maximise production only to find themselves unable to service the credits after the price plunged from Sh2,000 per kilogramme to Sh100.

The market situation has left a lot of farmers at a crossroads, and hope of a change of fortunes is dwindling. The Indian government through its ministry of Commerce and Industry issued a Trade Notice No. 13 (2015-2020) in August, 2018 restricting importation of pigeon peas from countries they do not have bilateral agreement with on the crop.

Tanzania does not have bilateral agreement with India on the pulses. It is estimated that more than 73,000 metric tonnes of pigeon peas may have not been harvested and another 90,000 metric tonnes is held by farmers and traders who are still waiting for the price to rise.

The decision to restrict pigeon peas is also attributed to overproduction in India, the world’s largest consumer and producer of pulses.

Distressed farmers, who spoke to The Citizen say they are failing to service loans amid lack of official statement on when the market situation will come back to normal.

Mr Abdallah Mamu, a farmer from Kidodoma village in Tunduru District says he secured a Sh5 million loan from a mainstream bank to prepare his 45 acres of pigeon peas. He managed to harvest nine tonnes, but has not been able to sell the crop fearing that he would not recover costs.

He claimed to have abandoned many acres in his farm to avoid costs of harvesting and transporting.

Mr Mamu hoped to make good money this year after earning a super profit after cultivating 40 acres in the 2015/2016 season and managed to sell at Sh2,000 a kilo. “The price drop has devastated the livelihood of many farmers particularly we who took loans from banks. I am now forced to take what I earned in cashewnut sales to service the debt. A lot of farmers are in trouble,” he said.

Another farmer, Musa Mpelembe of Semeni village in Tunduru District says he was facing a huge burden of repaying Sh7 million he borrowed from a bank to cultivate 20 acres of pigeon peas.

He expected to sell a kilo at Sh2, 000, but has failed to sell the stock. “Until now I cannot figure out how I will repay the debt, I have paid little money from my cashew nut sales,” he says.

“Indeed, there is a huge outcry from farmers in Tunduru, who took loans and they don’t know how they can repay. We ask the government to help us secure a good market,” he says.

Ms Salma Hussein, a resident of Minazini village in Namtumbo District says she borrowed Sh3 million from the Village Community Bank to develop her pigeon peas farm, but she is struggling to service it.

She is asking authorities to take stern action against companies and businessmen who go to their villages and encourage people to engage in pigeon peas farming. “Nothing hurts like companies sending people to move around in villages to persuade wananchi to cultivate pigeon peas on a promise that they would purchase the crop at a good price, but they never buy and leave us with huge debts.

“The government should force them to start making advance payments before we start production,” said Salma. The hardship of repaying loans caused by the collapse of the Indian pigeon peas market has also hit farmers in several villages in Newala District in Mtwara Region.

Ms Safina Mohamed borrowed Sh400,000 from Vicoba when she decided to expand her pigeon peas farming last season. She had no idea prices would fall drastically. She is among several farmers at Ujamaa village in Newala who injected their borrowed cash to increase cultivation of the crop last season following successive three years of stable prices.

She is now at a crossroads. She is holding a huge stock following the fall in price and lack of demand while at the same time required to service the loan.

“In 2014, the price was convincing, we sold one kilo at Sh2,000 and continued to rise in the consecutive two seasons. I decided to borrow Sh400,000 to boost production, but despite bumper harvests, the price has fallen to Sh150 per kilogram. Worst still, there are no buyers,” said Safina.

She has sold half of her stock at Sh150 per kilogram and was forced to dispose of a sizable amount after they were attacked by pests.

Mr Salum Adimu, a farmer and pigeon peas retailer from Mkoma 1 village in Newala District says he took Sh10 million from a bank to successfully cultivate pigeon peas, but he sees no prospects of servicing the loan following the price drop.

He collected huge quantities of the crop in last July targeting to sell to Indian traders, but all his efforts were in vein.

“As we are speaking today, we have no idea where we will take our stocks. I offered a collateral to secure a loan,” he says.

Mr Ayubu Kupela says she has a Sh20 million loan to settle after borrowing to run a pigeon peas business. “Now, I am worried that my house might be auctioned,” he says.

He is asking the government to consider purchasing huge stocks and sell them to public institutions to enable them service loans and save the pigeon peas industry.

“I have failed to settle fees for my two children in college and I have no means because I have not been able to sell my stock,” he says.

Financial institutions are reluctant to disclose details of their customers or trends in agricultural lending, but confirmed pigeon peas farmers were struggling to repay the loans.

“When market situation changes like the one we witness in the pigeon pea business, its obvious borrowers will be in trouble…I cannot give details, but we have such cases,” said a bank official who sought anonymity.