Farmers' protests: Short-term crop loans at 4 per cent to douse unrest

In move that seems intended to douse unrest after the violence in Mandsaur and farmer protests in Maharashtra, the Centre has increased the quantum of its ongoing scheme of cheaper loans for farmers from Rs 15,000 crore to Rs 20,339 crore.

The proposal states that the measure is intended to help farmers withstand the pressure of distress sale of produce by accessing concessional lending where they get short-term loans up to Rs 3 lakh at an interest rate of 4% if they return the amount on time within a year.The proposal for an increase in the budget for such loans was framed on June 7, a day after the Mandsaur firing that killed six farmers. The interest subsidy provided by the Centre aims to incentivise farmers and help improve yields and production, said official sources. The Centre also decided to consider payment of pending liabilities of Rs 28,500 crore that will take the total payout to Rs 48,839 crore. This will include Rs 19,685 crore by way of interest subvention (subsidy) in 2017-18, Rs 432 crore for loans against negotiable warehouse supplies, Rs 222 crore for post-demonetisation relief besides the pending liabilities under the short-term loan subvention.

The scheme will apply to all farmers though the government has estimates of scheduled caste and tribe beneficiaries as well. It is estimated that around 75% of farmers who take shortterm loans will be able to return the amount within nine months and will be eligible for benefits.

The government hopes that the principle of rewarding farmers who repay dues on time will encourage responsible borrowing and reduce demands for loan waivers. Seeking to bring more farmers under the institutional credit net and reduce post-harvest distress sale, the measures seem to take into account the protests in the two BJP-ruled states, where farmers had to go for distress sale after bumper production. This was because most of them didn't have enough money for storage in accredited warehouses. In order to provide relief to marginal farmers who have to borrow at 9% for the post-harvest storage of produce, scheme has a provision of an interest subvention of 2% (an effective interest rate of 7%) for loans up to six months.

The measure seeks to disengage farmers from non-institutional sources of credit, where they are prone to exploitation by private lenders.“All short-term crop loan accounts will be Aadhaar-linked from this year,“ said an official, adding it will help prevent leakage and help identify beneficiaries reliably . The move is expected to boost kharif crops whose sowing is to begin in the next one to two weeks with the gradual progress of monsoon. The interest subvention scheme has been in running since 2006-07. Under this, farmers can avail concessional crop loans of up to Rs 3 lakh at 7% interest (originally at 9%). Since it provides for an additional subvention of 3%, the short-term crop loans up to Rs 3 lakh is available to farmers at an interest rate of 4% if they pay the loan amount within one year.

Allahabad farmer commits suicide
A 60-year-old farmer allegedly committed suicide by hanging himself from a tree in Allahabad's Bakhtiyara village on Wednesday. Rambabu Dwivedi had taken loans of over Rs 5.5lakh from banks to grow potatoes. In MP, a debt-ridden farmer committed suicide in Balaghat district on Wednesday. He had a loan of Rs 2 lakh. This is the fifth farmer suicide in the state after the government announced steps to stop raging protests. TNN

Maharashtra CM `ready for mid-term polls'
The Maharashtra BJP unit is prepared for mid-term polls, CM Devendra Fadnavis said in Mumbai on Wednesday.Responding to reports speculating mid-term polls in Maharashtra amid the farmers' stir, he said, “Some people said they will bring the government down, will withdraw support. I said we are ready for mid-term polls.“

“If someone wants to impel us to go for mid-term polls, I am confident we will be able to form the government again,“ Fadnavis told the reporters.