The State Federation of Farmers’ Association has drawn the attention of the Reserve Bank of India (RBI) to the mounting financial crisis of farmers caused by the drought, and now accentuated by the demonetisation exercise.
Right from the lack of an adequate support price that has collapsed by 30 per cent to the failure of cooperative societies and banks to extend loans for the timely commencement of agricultural activities, many such issues have been listed by the federation as requiring immediate resolution.
Federation president Kurubur Shanthakumar said more than 50 per cent of farmers have been refused fresh agricultural loans by banks and cooperative societies. “In the past, farmers would approach private money lenders in such situations to avail of loans and start agricultural activities. However, following demonetisation, even private money lenders are unable to dispense with loans. This has aggravated the crisis plaguing the farmers,” said Mr. Shanthakumar.
Contrary to the RBI directives that account holders could withdraw upto Rs. 24,000 a week, most banks in rural areas are only allowing withdrawals of upto Rs. 5000 per week citing the currency crunch, according to the association.
It called for remedial measures to help farmers tide over the crisis plaguing them owing to demonetisation and suggested that the government purchase agricultural produce at the APMCs at rates higher than the minimum support price. It called for a policy to enable farmers loans up to Rs.1 lakh without documentation besides sanctioning market rates as compensation for crop loss incurred by farmers due to drought.
A meeting with the RBI officials in Bengaluru and the Chief Minister Siddaramaiah is also slated to be held on Friday to discuss the above issues, said Mr. Shanthakumar.
