KOCHI: Demonetisation and the looming drought are all set to impact paddy production in the State.
Already hit by lack of rains, farmers are staring at a 30-40 per cent decline in agricultural loan from cooperative banks, a major lifeline of thousands of paddy farmers.
This comes at a time when the Agriculture Department is striving hard to raise the acreage under paddy cultivation by providing ample incentives and schemes.
Jose Philip, additional registrar (Credit), Department of Cooperation, told ‘Express’ that cooperative banks, in association with the National Bank for Agriculture and Rural Development (NABARD), had provided agriculture loans amounting to Rs 4,300 crore in the state during the last cropping season in 2015-16, whereas it was Rs 3,890 crore in the 2014-15 fiscal. However, now there would be a drop of 30-40 per cent in agriculture loans for farmers after the restrictions on transactions in the wake of demonetisation, he said.
Though there is provision for the continuation of interest subvention by cooperative banks for short-term crop loans at 7 per cent, the farmers who had availed interest subvention scheme are likely to lose the three per cent subvention announced by the government this time, said Jose. He added that paddy farmers will be the most affected by demonetisation as 70 per cent of the agriculture loan extended to farmers was in paddy farming sector.
Dr P Indira Devi, Head of Centre of Excellence in Environmental Economics, Kerala Agriculture University, said the cash crunch will certainly affect the farming activities and the farmers will be forced to tighten their purse strings in order to cut costs in the field in the absence of sufficient money to meet farming requirements.
Though the State Government has announced a moratorium on repayment of loans given by cooperative credit institutions till March 31 next year, it is still not clear whether the farmers who availed the agriculture loans will get the benefit of interest subvention, she said.
The department has already taken steps to cultivate rice in 2,567.82 hectares of fallow land in 11 districts. Rani, Chithira and Methrankayal and Aranmula paddy fields will be covered. Besides, the government is on a mission to raise the area under acreage of paddy from the current 1.94 lakh hectares to 3 lakh hectares, apart from the upland paddy cultivation to one lakh hectares in the state, over the next five years.
The effect of the current financial crisis would be multiplied in the wake of truant rains, which were 34 per cent deficient during the south west monsoon period and 62 per cent deficient in north east monsoon, which is likely to open up a slew of issues in terms of plant health management and crop production, say experts.