BHUBANESWAR: The Cooperation Department has drawn a set of proposals to be taken up under Farmers’ Welfare Fund (FWF) aimed at addressing the problems marginal farmers have been facing in the State.
While priority is being given to formation and credit linkage of Joint Liability Groups (JLGs), for which guidelines have already been formulated, the Registrar of Cooperative Societies (RCS) has suggested interest-free revolving fund to the groups.“It has been proposed to provide Rs 10,000 as an interest-free revolving fund to each JLG for their initial economic activities. The sharecroppers, tenant farmers and landless cultivators will improve economically through the JLGs,” said an official.
As many as 99,504 JLGs have been formed in the State and around Rs 100 crore is required for initial assistance. The Department has also proposed interest subvention for JLGs and credit life insurance for RuPay Kisan Credit Card (KCC) holders.
At present, crop loan of Rs 12,000 crore has been financed to around 30 lakh accounts of about 21.44 KCC holders. Though personal accident insurance is now provided to the extent of Rs 1 lakh per beneficiary, in case of a natural death the family members are paying back dues of the bank.
“The legal heirs of the deceased are put to severe financial distress and are unable to sustain loan burden after the death of earning member. If credit life insurance coverage can be provided through a Master Policy with a nominal premium, all natural death cases of loanee farmers can be covered,” the official said.
Credit life insurance will also help insurance companies liquidate the loan outstanding of the Cooperative Banks/Societies making the family of the deceased farmer member debt free. Nearly Rs 24 crore would be required as an insurance premium for the coverage of all RuPay KCC holders.
States like Karnataka and Uttar Pradesh have already issued circular to Cooperative Societies to enrol the loan borrowers for credit life insurance.
Though as per the guidelines of Nabard, interest subvention is applicable for crop loans, the facility is not available for non-farm sector loans like vending of vegetables, flowers and small shops who are charged 12 per cent interest. The interest rate is subsidised for Self Help Groups who are charged 7 per cent.
“Since around Rs 400 crore would be financed to JLGs, interest subvention at the rate of 5 pc has been proposed to bring parity of financing between SHGs and JLGs. Nearly Rs 20 crore required for it can be met from the FWF,” the official added.
Farm help