March 14, 2021 7:36:10 pm
After announcing zero-interest crop loans, the state government has turned its focus to enhancing the credit flow to accommodate maximum small and marginal farmers along with strict monitoring to plug the misuse of crop loans for other allied activities.
Agriculture Minister Dadasaheb Bhuse has directed officials to evolve a mechanism for stricter enforcement of zero-interest crop loan scheme from the kharif season beginning June 2021.
The challenge for the state government is to provide 57 per cent farmers easy access to financial institutions for fresh crop loan. Data shows that the average crop loan disbursement to farmers has remained at 43 per cent.
In the budget, Deputy Chief Minister and Finance Minister Ajit Pawar announced the zero interest crop loan scheme. The objective was to provide financial relief and enhance credit cover to left-out farmers.
According to Pawar, “It has been observed that farmers often found it difficult to repay interest on crop loan. To free farmers from interest burden and turning defaulters, the government decided to extend zero interest loan to farmers who take up to Rs 3 lakh and repay on time. The amount on interest rate on crop loan will be paid by the government to financial institutions on behalf of farmers.”
The Rs 3 three lakh loan limit was determined after finding that it would cover 90 per cent small and marginal farmers. Of a total 1.56 crore farmers in the state, 78 per cent are small and marginal farmers.
Bhuse said, “The interest-free incentive will encourage more farmers to approach financial institutions and drive them to make regular loan repayment.”
However, officers in the Cooperation Department said, “Financial institutions will have to play a significant role. Delay in loan disbursement often drives farmers to look for alternatives as he/she cannot wait once the sowing season begins. Once they land in private hands, the cycle of debt is hard to break.”
Simplifying the mechanism for implementing the scheme is a formidable task, and monitoring will require huge manpower, which is not practical, the officer added.
In 2020-21, crop loan disbursed was Rs 42,433 crore – higher than Rs 28,604 crore in 2019-20.
The state government under Mahatma Jyotiba Phule Karja Mukti Abiyan also disbursed Rs 19,929 crore to 31.22 lakh farmers.
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