Withdrawal of subsidised agri-loans hits farmers

They were unable to renew the loans due to lockdown

The unexpected withdrawal of subsidised agriculture gold loan by public sector banks has come as a bolt from the blue for hundreds of farmers who are going through acute financial crisis with the COVID-19 outbreak and the subsequent lockdown across the State.

Those who renewed their gold loans after October 1, 2019, are now in a situation to pay off more than 7% interest to renew it without subsidy benefits.

Rural farmers who could not renew the loans by paying 4% interest due to COVID-19 regulations have been asked to remit the full interest rate without any special consideration. One complainant said that banks were not concerned about the situation and claimed that the changes were the result of a policy decision of the government.

Complainants said the banks had not given any information regarding the withdrawal of the scheme. At the time of deposits after October 1, 2019, bank authorities could have at least given a hint on the possibility of cancelling the scheme, they pointed out.

Following public protests, some of the banks had given a verbal assurance over the possibility of crediting back the eligible subsidy amount to the beneficiary’s account with government intervention. However, the complainants said there was no such assurance on the part of the government and that they may lose their money already credited as interest.

Farm organisation leaders said the increased interest rate had forced many low income groups to consider the total withdrawal of the deposited gold and sell it outside for addressing the financial crisis. According to them, there are even poorly paid expatriates who obtained loan for agriculture purpose in their home land and struggled with the unexpected development in the banking sector.

Jijo Thomas, a leader of ‘We Farm’ hillside farmers’ collective, said many farmers in the rural areas of Kozhikode were not even thinking of renewing their gold loans now with the looming financial crisis. “Though the government has assured the benefit of the subsidised scheme to Kisan card holders, no one has so far benefited from it,” he said.

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Printable version | Jun 1, 2020 2:07:36 PM |

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