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Farm loan waiver may give Karnataka farmers easier access to credit -

-Livemint.com

Burden of farm loans has driven many Karnataka farmers into the clutches of moneylenders, who at times charge even by the hour

Bengaluru:
Naveen Kumar, 40, a small farmer in Hassan district, Karnataka, paid Rs.2,400 as premium (Rs.1,200 per acre) to insure his jowar crop last year.

The crop failed after deficient rains. But Kumar was covered—or so he thought. Earlier this year, he received Rs1,600 (Rs800 per acre) as compensation—33% less than what he paid in premium. He does not know the actual insurance amount.

“No farmer here knows the real reason. Local officials and the bank are also clueless. We got less than what we paid as premium,” Kumar said. He is among the state’s 7.5 million farmers now banking on a farm loan waiver announced by the state on Wednesday.

The government has agreed to waive crop loans worth Rs8,165 crore or up to Rs50,000 per farmer borrowed from cooperative banks. Cooperative banks have disbursed Rs10,736 crore while nationalized and commercial banks have lent over Rs.42,000 crore. The waiver will benefit over 2.2 million of the state’s farmers.

The government says in order to help the rest, it needs support from the Central government, which has flatly refused to back farm loan waivers.

Earlier, Congress vice-president Rahul Gandhi’s visit to Mandsaur in Madhya Pradesh where six people in a farmers’ agitation died in police firing and subsequent demands to waive farm loans in that state had irked farmers in Karnataka. “If he can demand this in MP, can’t he instruct the same to Congress-ruled Karnataka,” Kodihalli Chandrashekar, president of the Karnataka Rajya Raitha Sangha (state farmers’ association) said.

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