Moot law to enable them to give loans without undue risks
THIRUVANANTHAPURAM: Commercial banks have proposed to the State government the enactment of a legislation to enable them to give loans, without taking undue risks, to farmers cultivating crops on land taken on lease.
State Bank of Travancore (SBT) already has a scheme designed exclusively for disbursing loans to lease-land farmers. The bank had launched the scheme a couple of years ago after an assessment of the ground realities in the State and coming to the conclusion that such a scheme was necessary to increase bank support to farmers to the levels envisaged by the Union government.
Due to land fragmentation, absentee landlordism and similar reasons, a very large extent of agricultural land in the State remains fallow. The State government too is deeply concerned about this problem and has been, during the past three years or so, trying to bring the fallow fields under cultivation. The State is severely insecure in the matter of food production.
Government schemes and campaigns could not, by themselves, address this problem. The sustained success of any effort to bring the fallow lands under cultivation can be ensured only if those who are truly into farming are provided with financial support to cultivate unused fields under lease arrangement with the absentee landlords. But lease arrangements are not legally valid in Kerala and the banks that extend their financial support to lease-land farmers are doing so at some risk.
The State Level Bankers’ Committee (SLBC) had, some time ago, suggested to the State government the scope of a legislation to encourage true farmers to take on lease the fields of absentee landlords and a section of marginal farmers who find farming operations unviable because of practical difficulties. This legislation can have legal provisions for mortgage of lease in favour of the banks and the right for the banks to transfer the lease to others in the event of credit default. The original owner of the land will not lose his or her ownership rights.
This suggestion had come up for discussion in the committee several times in the past two-three years. The government’s representative informed the committee at its latest meeting that the government had to consider the matter at its policy level.