The Hindu : Andhra Pradesh News : Vadde for soft loans to farmers

Online edition of India's National Newspaper
Wednesday, Nov 03, 2004

Andhra Pradesh

Andhra Pradesh

Vadde for soft loans to farmers

By Our Special Correspondent

HYDERABAD, NOV. 2. TDP leader and former Agriculture Minister, Vadde Sobhanadreeswara Rao, on Tuesday demanded adequate short and long term credit on time to all farmers, including tenants, and called for effective steps to ensure that interest and penal interest put together do not exceed the principal amount.

Addressing a press conference, Mr. Rao said he had submitted a memorandum to Jayati Ghosh, chairperson of the Commission on Farmers Welfare, listing the reasons for the distress among farmers and suggesting steps to redress them.

Inadequate availability of agricultural credit from cooperative banks and regional rural banks was the main reason for such distress.

Increased lending

This forced the small, marginal and tenant farmers to approach private moneylenders and take loans at 24 to 36 per cent interest, he added.

He said since agriculture and allied activities contributed 26 per cent to the GDP, banks and other financial institutions should be mandated to disburse 26 per cent of their credit portfolio to the farm sector as against 18 per cent now.

A simple interest not exceeding 6 per cent should be charged on loans taken by farmers, farm labourers and rural artisans.

He wanted amendment to the Seed Act providing for appropriate payment of compensation in case of germination failure or yield loss.

Postponement of loans

He suggested that the Rythu Bandhu scheme should be expanded to cover major crops, to help farmers avoid distress sales. Apart from crop loans, loans taken for education and marriage of children should also be postponed.

Delay in confirmation of suicides and payment of ex-gratia should be cut.

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Andhra Pradesh