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LATEST NEWS UPDATES | Farmers stop repaying loans taken during 2008-2010 by KV Subramanya

Farmers stop repaying loans taken during 2008-2010 by KV Subramanya

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published Published on Dec 2, 2010   modified Modified on Dec 2, 2010

Agricultural Debt Wavier and Debt Relief Scheme (ADWDRS-2008), which was introduced by the Union Government in 2008 to provide debt relief to farmers, has backfired in Chickballapur district.

Under the belief that the Government would come out with a similar debt wavier/relief scheme in the future, a majority of farmers have stopped repaying fresh agricultural loans they have taken during 2008-09 and 2009-10, subsequent to the implementation of ADWDRS-2008.

Thereby, many farmers, who have now turned defaulters, and are thus ineligible to get any loans from banks, are back at the doorsteps of private moneylenders. Seed suppliers, fertilizer traders and prospective buyers of farm commodities were lending loans to farmers at exorbitant rate of interest, according to senior officials in the district administration as well as bankers. A similar situation is said to be prevailing in most of the districts in the State.

At the Block Level Bankers Committee (BLBC) meetings held in all the blocks in the district recently, bankers have said that “their hands were tied” in regard to sanctioning fresh agricultural loans and renewing crop loans as farmers were “averse” to pay agriculture loan instalments and also they did not evince interest in renewing crop loans. The views expressed by the bankers at BLBC meetings were discussed at the District Consultative Committee meeting convened by the District Lead Bank here on Tuesday.

Chickballapur Deputy Commissioner N. Manjula, who chaired the consultative committee meeting, said that the situation was “alarming” as farmers were approaching private moneylenders instead of obtaining loans at lower/subsidised rate of interest from banks.

The purpose with which agriculture loan schemes and debt relief schemes were implemented by the Government seems to have been defeated, Dr. Manjula said.

Joint Director of Agriculture would be asked to convene a meeting of farmer leaders next week to chalk out strategies to bring the farmers back to banks, she announced. According to District Lead Bank Manger Chandrashekar, advances and recoveries under the agriculture and allied sectors in the district had come down drastically as on September 30, 2010 leading to an increase in non-performing assets in the branches.

Mr. Chandrashekar said that the banks had surpassed the target (105 per cent) in disbursement of loans under agriculture and allied sector in 2009-10. However, the achievement was only 66.13 per cent at the end of the second quarter this fiscal.


The Hindu, 2 December, 2010, http://www.thehindu.com/todays-paper/tp-national/article926502.ece


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