Wednesday, October 8, 2008

Law Of The Land

Around 7 years back, when I got back to Bihar to get my farm land in order.
I thought it would be a cake walk for a relatively educated guy like me.
I tried all that I had learnt from the text books, crop rotation, newer implements and crops.
All the effort proved futile, as we didn't have enough silos and no roads to reach the market.
We moved on to adding value to our crops by processing them, initially by renting out units.
At this point it was realized that it is better for us to have our own unit as we grew.

When we approached the bankers for a loan, which after much persuasion they agreed to some paltry amount, they wanted collateral security in form of land.

Besides the land ceiling act being quite a pain, my Father has managed to save a substantial amount of land from the goons at the government.

But the Banks can not take Agricultural land for a loan of Industrial Use. so what if it was a food processing industry. so what if the raw material came from the same fields.

We had to sell Agri land to buy urban land and then place it for collateral to secure a paltry loan which is 50% of the value of the urban land.

We are ready for exponential growth now and cant do without the banks. So we need to sell more land to get more loan.
At some point all will not be enough, and my industry will be affected, because if you are not growing you are dying.
More over, the reason this industry was setup was to add value to the farm land.

Now there will be no farm land.

The law of the land assures that,
Farmers can not be industrialist.
Farmers will not get a loan to buy a Lexus.
Farmers can only buy tractors.
Farmers should not think Big.