Centre urged to cut interest on agri loans

Bhubaneswar: Describing that farmers in the state have sustained severe crop losses due to drought and pest attacks, the state government Monday urged the Centre to keep the interest on medium term (conversion) loans at par with the crop loans and provide interest incentive of 3 per cent to farmers who have availed of this loan.

Chief Minister Naveen Patnaik Monday sought intervention of Prime Minister Narendra Modi in this regard. In his letter, Patnaik said, “The union government provides interest incentive at 3 per cent to the prompt paying farmers in respect of crop loans which is not made available in case of conversion of such crop loans in the event occurrence of natural calamities. As a result, the interest rate on the converted loans remains at a higher rate, which is at present 11.20 per cent.”

The chief minister further said, “In my opinion, when crop loans are converted into medium term loans, the interest rate should remain at par with the crop loan.” Likewise, he said, the incentive made available to the prompt paying farmers for crop loans should also be extended to the medium term (conversion) loans to provide relief to the farmers affected due to drought and pest attack.

Stating that the state government has already initiated proactive measures to provide relief to the farmers who have sustained crop loss, Patnaik said it has been decided in the state that in case of 33 per cent to 50 per cent damage of crops, loans will be converted into medium term repayable in a period of two years with a moratorium of one year, while in case of damage of crops 50 per cent and above, loans will be made repayable in five years with one year moratorium.

“Therefore, I request your intervention in the matter to keep the interest rate on the medium term (conversion) loans at par with the crop loans and also extend the interest incentive of 3 per cent admissible on crop loans to the medium term (conversion) loans,” he wrote.

Notably, with around 1.28 lakh hectares of farm land in the state being pest-hit, the state Cooperation Department has already asked the Registrar of Cooperative Society to extend the due dates of crop loans of farmers from March 25, 2018 to September 30, 2018 as part of government’s decision to convert short term loans to medium term loans for farmers affected due to pest attack.
It has also asked the Registrar of Cooperative Society and Orissa State Cooperative Bank to speed up the relief measures and provide fresh loans to affected farmers within a period of 15days from the date of their application positively.

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