THIRUVANANTHAPURAM: After the mid-August floods pushed several farmers on to the brink and some even to suicide, the state government is mooting a major plan to restructure the very concept of agricultural loan to lift them out of the crisis.
As per the proposal, instead of focusing only on agricultural loans, the government would take measures to reduce the farmers’ entire loan burden.
Different types of loans — for children’s education, medical treatment and wedding — taken by farmers who rely only on agriculture as their only source of income, would be treated on a par with agricultural loans. Support measures including loan or interest waiver could be made applicable for such loans as well.
“Going by the existing criteria of agricultural loans, we wouldn’t be able to address issues usually faced by farmers. Hence we’re of the view that the criteria for repayment of farm loans must be made applicable to all loans taken by farmers who’ve only agriculture as their source of income,” said Agriculture Minister V S Sunil Kumar.
“The practice of declaring moratorium, which leads to existing loans being converted into term loans, wouldn’t be beneficial to farmers in the long run. That too must be addressed,” he said.
A recent State Agricultural Prices Board study, which analysed 104 case studies of farmers across the state in depth, has revealed their loans average `5.18 lakh, with a majority being non-agricultural. Of the 104, 54 per cent have taken loans. Idukki farmers’ loans average `7.97 lakh, of which farm loans come to just around `2.58 lakh. The repayment of loans depends on income from farming.
CM to convene banks’ meeting
Sources said as per the existing norms, state government can do precious little for the struggling farmers.
“By converting the loans to term loans, the farmers mostly end up repaying more. On an average, they’ll be paying around 40 per cent additional for the rescheduled loans. Moratoriums offer only short-term relief. So, options have been explored.
One suggestion is the government paying interest on loans during the moratorium period,” said sources. Top officers with the Agriculture and Finance Departments have been putting their heads together to come up with some effective solutions to the farmers’ debts.Taking the issue into consideration, Chief Minister Pinarayi Vijayan will soon convene a meeting of the banks.