Farmers return after purchasing seeds from PAU in Ludhiana. Gurmeet Singh
Amid reports of farmers turning to money lenders after their CIBIL scores getting affected due to non-payment of loans, the Punjab government has decided to allow only licenced money lenders to lend money that too within the limit fixed by the government.
The Cabinet that met here on Thursday gave its approval to tabling of Punjab Settlement of Agricultural Indebtedness Bill, 2018, in the Vidhan Sabha session beginning Friday. The Bill provides for fixing a limit on the advance on per acre of land, with the rate of interest also to be duly determined by the government. Recent reports had indicated that farmers were turning to uninstituionalised money lenders after their CIBIL scores were spoiled for not repaying the loan on time. The farmers have been waiting for the debt waiver as promised by the government bit not all farmers got it.
A statement by the government said the Bill, aimed at further relieving the state’s farmers from the vice of debts, proposes a series of measures to protect the interests of the farming community, saving them from the clutches of unauthorised money lenders who charge exorbitant rates to give unlimited amounts as loans.
After the enactment of the Bill, only licenced money lenders will be allowed to advance the money, with lending by others deemed to be illegal. Only these licensed money lenders will be allowed to move the debt settlement forums, which will be headed by Commissioners. The lender would be required to submit proof of the amount lent to the farmer.
It has also been decided to bring down the total number of debt settlement forums from 22, as per the existing Act passed in 2016, to five, according to an official spokesperson. The new forums would be constituted at the divisional levels.
The decision to amend the existing law on farm loans has been taken to curb the growing trend of agricultural indebtedness, resulting in mismatch between the prices of agricultural inputs and minimum support price of agricultural produce. The farmers raise loans from both institutional and non-institutional resources.
However, while the institutional loans are regulated through various special legislation governing the institutions providing such loans, non-institutional loans are largely unregulated having no mechanism for redressal ofgrievances of debtor.
In light of this, the government has enacted the law to provide a framework for regulation and settlement of agricultural debts.
In another important decision, the government would table another Bill to create a Price Stabilisation Fund to ensure that farmers in the state get the Minimum Support Price (MSP) for their produce.
“The Bill is aimed at protecting the interests of farmers in the event of a sudden fall in prices of certain agricultural commodities below normal prices. It will bring about amendments to Section 25 (A), 26 and 28 of the Punjab Agricultural Produce Markets Act, 1961.” said a government statement.
As per the amendments, contribution will be charged out of the commission charged by arhtiyas towards Agricultural Produce Price Stabilisation Fee.
The Arhtiyas (commission agents) had given a representation to the government a few days ago not to include them in the Bill but the government has not spared them.