Naveen Patnaik appeals to Modi to help Farmers with low interest

The Odisha government today urged the Centre to relieve distressed farmers in the state by keeping interest rates soft on those converting crop loans into medium-term loans. Chief Minister Naveen Patnaik made this request in a letter to Prime Minister Narendra Modi. “I would request your intervention in the matter to keep interest rate on medium term (conversion) loans at par with the crop loans and also extend the interest incentive of 3 per cent admissible on crop loans to the medium term (conversion) loans,” Patnaik said in the letter. In order to help the farming community facing crop loss, the state govenrment has already initiated proactive measures to provide relief to the affected farmers promptly, Patnaik said adding, as part of the package announced for the farming community, it has been decided to convert the crop loans advanced during Kharif-2017 season in the affected areas as medium term (conversion) loan. The farmers in Odisha have suffered crop loss due to drought and pest attacks during this kharif season. In case of crop damage between 33 per cent and 50 per cent, the crop loan can be converted into medium term (conversion) loan repayble within a period of two years with a moratorium of one year. Similarly, where the crop damage is 50 per cent and more, the conversion of the crop loans can be allowed for a minium period of five years with one year moratoriium, Patnaik said. The chief minister said the Union govenrment provides interest incentive of 3 per cent to prompt payers when it comes to crop loss, but that is not the case for conversion of crop loans in the event of natural calamities. As a result, the interest rate on the converted loans remains at a higher rate, which is at present 11.2 per cent.

Similarly, the interest on crop loan is not subsidised as interest subvention for the same is not available, Patnaik said. “In my opinion, when crop loans are converted into the medium term loans, the interest rate should remain at par with the crop loans. Similarly, the incentive made available to the prompt paying farmers for crop loans should be extended to the medium term (conversion) loans to provide relief to the farmers affected due to drought and pest attack,” Patnaik wrote in the letter.