Centre asks banks to restructure crop loans to farmers

NEW DELHI: In a bid to provide relief to farmers affected by recent unseasonal rains, Centre today asked banks to restructure crop loans and also directed insurance companies to settle farmers' claims urgently.

Earlier this week Prime Minister Narendra Modi had announced the government's decision to raise by 50 per cent the quantum of compensation to farmers affected by crop losses due to recent unseasonal rains and hailstorm.

The Prime Minister had also asked banks to restructure loans of the affected farmers and instructed insurance companies to pro-actively settle their claims.

"The Central Government has asked State Level Bankers' Committees to facilitate timely restructuring of crop loans. With restructuring, the loan repayment period would be extended," Agriculture Ministry said in a statement.

Insurance companies have also been asked to settle the claims expeditiously, while state governments have been asked to ensure early completion of formalities for settling the insurance claims of farmers, the Ministry added.

It further said that the extent of crop damage is limited to 85 lakh hectares in states such as Rajasthan, Uttar Pradesh, Punjab, Haryana, Madhya Pradesh and Maharasthra, a sharp drop from the earlier estimate of 113 lakh hectares submitted by the states.

The Agriculture Ministry has also directed states to disburse relief from State Disaster Response Fund without any delay.

In view of damage to onion and potato crops, the Agriculture Minister Radha Mohan Singh has written to all states that there is likelihood of increase in their prices, and to avoid that purchase these vegetables under Market Intervention Scheme and maintain stocks, the Ministry said.