New Delhi, Nov. 13: The government today suspended recovery of crop loans, including interest, from farmers in 14 states whose fortunes have been blighted by a below-normal monsoon.
Rajasthan, Punjab, Delhi, Gujarat, Chhattisgarh, Haryana, Uttar Pradesh, Madhya Pradesh, Himachal Pradesh, Andhra Pradesh, Karnataka, Tamil Nadu, Orissa and Maharashtra will benefit from the relief.
Prime Minister Atal Bihari Vajpayee’s palliative gesture comes a month before strife-torn Gujarat — a major oilseed growing state — goes to polls next month. Elections are also scheduled in Himachal Pradesh in February, and in Rajasthan, Chhattisgarh and Madhya Pradesh next October-November.
Agriculture ministry sources said: “The proposal that was sent for Cabinet approval had sought a complete waiver of the interest for the financial year amounting to Rs 2,500 crore. If the proposal had been approved, the farmers would have had to pay only the principal amount of Rs 6,000 crore. This proposal was based on the recommendations of the Commission for Agriculture Costs and Prices.”
What the Cabinet has cleared instead is suspension of recovery but not a waiver. Loan and interest write-off is a one-off step, but suspension leaves room for manoeuvre in the future as the government can still decide next year to waive the repayment it has now suspended.
An agriculture ministry official estimated crop loans issued by various agencies at Rs 40,000 crore.
“The benefit will cover farmers in the affected areas, including the plantation sector,” Vajpayee said in a statement.
The government will also create a price stabilisation fund of Rs 500 crore to protect the interests of the plantation sector, especially coffee and tea growers.
It will contribute a major chunk of the funds to this corpus and will persuade state governments to help. There will also be a small contribution from growers. Income from the corpus will be used to provide relief to growers when the market is depressed.
Emphasising that effects of the drought would have to be tackled with “fortitude, prudence and unitedly until at least May-June 2003”, Vajpayee said the Centre was determined to do its utmost to minimise farmers’ difficulties.
He said the task force headed by deputy Prime Minister L.K Advani is meeting soon to decide further release of funds and foodgrain.