Crop loans still out of reach

CHENNAI, SEPT. 17. Despite the State Government's directive to cooperative banks to be liberal in issuing crop loan, the ground reality seems to be different.

Drought in the last three successive years has left farmers penniless. They pawned all their valuables and took all kinds of loans from cooperative as well as scheduled banks.

Enquiries reveal that on an average a small farmer is in debt of at least Rs. 1 lakh, a medium farmer Rs. 2 lakhs-3 lakhs.

That is why the Chief Minister, Jayalalithaa, announced total interest waiver and a two-year moratorium on repayment of the principal. This, officials at the headquarters here thought, would enable the banks in rural areas to extend loans to the affected farmers without difficulty.

Non-farm loans

In the last three years, the banks had given not only crop loans but also non-farm loans to the delta farmers. While the Government issued the moratorium on collection of crop loans, it was silent on non-farm loans.

Bank officials in the delta areas said a majority of farmers had availed themselves of non-farm loans for purchasing tractors, agricultural implements and for house repairs, apart from crop loans. The Government's instructions were silent on how to deal with a farmer who had dues under the "non-farm" category, the officials said.

As per the bank procedure, defaulters are not entitled to fresh loans. If the banks apply this condition, a majority of the farmers will automatically come under the "not eligible" category. This was the reason for rejection of crop loan applications, the officials said.

Bankers' dilemma

They complained that while the management was forcing them to extend loans without pre-condition, it was penalising them for non-recovery. They wanted the Government to give an assurance that they would not be victimised if the recovery rate was poor.

The farmers admitted that they had availed themselves of non-farm loans in the last three years. But owing to successive crop failure they were not able to repay the loans. Now the condition was conducive to raising the samba crop. The Government, they said, should instruct the banks to give loans without pre-condition. This gesture alone would enable them to repay their dues, the farmers said.

Realising the difficulties, cooperative bank officials from here toured the delta districts in the last week to help local managers clear loan applications. The banks were told not to ask for security for fresh loans.

Sources here said in the last one week, the banks had cleared thousands of applications. The Government, they said, planned to give at least Rs. 100 crores as crop loans in the current season.

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