Farmers in Calamity Prone Areas May Get 2% Subsidy
The EU budget for 2011-12 could give an unconditional 2% subsidy on short-term farm loans to all districts which are more prone to droughts and floods. Currently, only those farmers who repay loans on time are eligible for the 2% rebate, lowers interest rates in the short term crop loan to 5% as banks such loans at 7% interest to give. Maharashtra, Karnataka and Andhra Pradesh record the highest levels of farmer suicides and the forced sale of farm products in the country as people struggle to repay loans, particularly in the drought-affected districts. In 2008, the government announced an RS-71000 crore debt waiver scheme after it was declared a drought year.
The government is also likely to take steps away from the Kisan Credit Card Network, which will ensure that loans are easily accessible to more farmers to expand to announce. “The amount of agricultural loans is growing by leaps and bounds each year, but unfortunately the same farmers (77.68 lakh farmers currently) take a higher loan. There is stagnation in the past two years for new farmers entering the system, “the official said. Government figures show public sector commercial banks disbursed Rs 86,284 crore in loans to farmers in the first half of the current fiscal.