Battered by increasingly violent cyclones, farmers struggle to repay their loans

When Super Cyclone Amphan made landfall in Bangladesh in May 2020, 55,000 homes were destroyed in the country. Wasim Ali, 45, lived in one. The tidal surge caused by the storm swept away his house and razed his small one-acre farm in Protapnagar, in the Satkhira district of southwestern Bangladesh. Tens of thousands of people were left without resources after this huge natural disaster. But the misery is deeper for Wasim.

As well as losing his home and farm, the disaster also left him with no way to repay a debt of 42,000 Bangladeshi takas ($440), an amount he had borrowed from a bank as a loan. agricultural. He had pledged his farmland as collateral and says he is now afraid to confront bank officials.

“I can barely support my family of five on the small piece of land I’ve managed to grab since the disaster. It’s impossible to repay the loan on land that doesn’t even exist anymore,” Wasim says.

Collateral pledged voided

Nearly a third of Bangladesh’s total landmass is found in its coastal zone, which spans 47,201 square kilometres, according to a study. This area is home to approximately 35 million people, or 29% of the country’s population.

These communities rely heavily on agriculture, working on their small, fragmented lands. In a form of short-term assistance, the government is making available up to 50,000 taka (about $530) in agricultural loans to small farmers, disbursed through commercial banks.

These loans carry interest rates ranging from 5 to 10 percent for a single crop year, depending on the bank and the type of crop, and farmers are expected to repay the principal plus interest after harvest.

Nearly a third of Bangladesh’s total landmass is in its coastal zone, which spans 47,201 square kilometers (18,224 sq mi), and the area is home to around 35 million people, or 29% of the population of the country. Credit: Maksuda Aziz/Mongabay.

Although loan amounts are small at the individual level, collectively, agricultural loans constitute a significant portion of Bangladesh’s banking business. The country’s central bank said agricultural loans for the year to May 2022 amounted to 284 billion taka ($3 billion).

This constituted 20% of all loans distributed in the country during this period. An agriculture-focused lender, the state-owned Bangladesh Krishi Bank, disbursed 200 billion takas ($2.1 billion) of these agricultural loans.

For these banks, however, the coastal regions are a headache: farmers there are increasingly in default due to natural disasters induced by climate change.

According to Bangladesh Krishi Bank, the two most affected sub-districts of Satkhira – Assasuni and Shyamnagar – have outstanding loans totaling 78.1 million takas ($822,500 million), disbursed through its three branches in Assasuni, Gunakarkathi and Shyamnagar.

Another state-owned lender, Agrani Bank, currently has 15 million takas ($158,000) on its books from two of its branches, in Assasuni and Shyamnagar.

During a visit to Assasuni, where Wasim Ali’s home and farm were destroyed by Super Cyclone Amphan, mongabay met several other people in equally disastrous situations.

Hasan Mollah has been listed as defaulter since another cyclone, Aila, hit the area more than a decade ago in May 2009.

“After losing the land, I lost my house and my source of income. To support my family, I had to move to town. Even so, I couldn’t find the 38,000 takas [$400] to repay the loan,” Hasan said.

The central bank has since 1991 made concessions to farmer-borrowers like Wasim and Hasan who have been hit by natural disasters. These release them from interest payments as long as they repay the principal amount.

“Banks operate like a business by lending loans, so they cannot lose capital,” Bangladesh Krishi Bank managing director Md Ismail Hossain said. mongabay. “We have rescheduled the loans and still have 21.3 million takas [$224,300] in this area which is classified”, or in the books.

Residents of the coastal communities of Satkhira. Credit: Maksuda Aziz/Mongabay.

loss of land

A third of Bangladesh is just 1–4 meters (3.3–13.1 ft) above sea level, and 80% of the country is floodplain. The southwest coast, including Satkhira district, is less than 2 meters (6.6 feet) above sea level.

This makes every millimeter of sea level rise a cause for concern in this densely populated region. Scientists estimate that by the year 2100, global warming will contribute to a sea level rise of 0.5 to 2 meters (1.6 to 6.6 feet). This would leave most of Bangladesh under water.

For now, the Sundarbans, the largest expanse of mangrove forest in the world, protect the country’s southwest coast. But increasingly frequent and intense cyclones bring heavy swells that threaten to break the resistance of the mangroves.

In Protapnagar, where Wasim Ali lives, a series of storms from 2019-21, including Amphan, rendered some 20 hectares (nearly 50 acres) of land permanently under water, according to findings from the Center for Environmental and Geographic Information. Services, a government research institute.

The storms also threaten another water-related disaster. The Water Development Board, responsible for safeguarding the country’s dams, said the embankment of the Kholpetua River, which runs through Shyamnagar and Assasuni sub-districts, has been weakened by repeated blows from storms .

Following Cyclone Yaas in May 2021, the agency undertook emergency repair of nearly 12 km of embankment at Protapnagar and nearly 5 km at Padmapukur in Shyamnagar.

The southwest coast of Bangladesh is less than 2 m (6.6 ft) above sea level. Scientists estimate that by the year 2100, global warming will contribute to a rise in sea level. the sea from 0.5 to 2 m (1.6 to 6.6 feet), which means that the coastal region will be under water. Credit: Maksuda Aziz/Mongabay.

“The whole embankment is in a vulnerable state as it was built around 60 years ago,” said Shamim Hasnain Mahmud, executive engineer at the Water Development Board. “Cyclones accelerate its decline.”

According to data from the Bangladesh Meteorological Department, the southwestern part of Bangladesh faced at least eight cyclonic storms between 2000 and 2020. Four were classified as severe to very severe, causing storm surges reaching 6 meters (20 feet). Three of them – Fani in May 2019, Bulbul in November 2019 and Amphan in May 2020 – struck within a year.

Cyclones may be a regular occurrence in the funnel structure of the Bay of Bengal, but climate change is making the storms more devastating. Warming sea surface temperatures increase the maximum potential energy a storm can achieve. And last May, the water temperature in the Bay of Bengal hit record highs, according to NASA, or the National Aeronautics and Space Administration.

Storms with more power and water release more rain and raise sea levels, allowing tidal waves to rush farther inland. This is why places like Protapnagar, 80 km from the Bay of Bengal, be battered by cyclones like Amphan.

Sea surface temperatures in the Bay of Bengal. The colors show the difference between the long-term average temperatures and the temperatures on May 16, when Cyclone Amphan developed. Credit: NASA via Mongabay.

Banks fail when farmers fail

The Center for Environmental and Geographic Information Services has predicted that between 2021 and 2023, the Padma Basin is vulnerable to 1,215 hectares of river erosion.

The United Nations agency for disaster reduction estimates that Bangladesh’s average annual losses could amount to $3 billion, or up to 2% of gross domestic product, or GDP, according to a World Bank report of 2021.

In addition to its baseline losses from weather hazards, Bangladesh is expected to incur additional costs from climate change by mid-century. If mitigation efforts are not intensified, this figure could reach 9% of GDP by the end of the century.

Golam Rabbani, head of the Climate Bridge Fund’s development secretariat at non-profit organization BRAC, said the actual amount of loss and damage will be much higher.

“It took five years to wash the saline solution from the ground after Cyclone Aila [in 2009], thus restoring rice production to pre-Aila levels, a study found,” he said, adding that the loss and damage estimates only take into account immediate effects. “Data on migration or alternative forms of employment are not kept in affected areas.”

Hossain, the bank manager, said that since the profitability of a bank branch depends on the economic well-being of local borrowers, migration and loss of livelihoods are detrimental to the bank’s operations. “Banks also fail if they fail,” he said.

This article was first published on Mongabay.