Faced with a desperate situation following a delay in income due to slow progress of auctions and MSP purchases, farmers have raised a demand for an extension of moratorium on crop loans till March 21, 2021.
After the extended lockdown due to Covid-19 outbreak, agri-commodities faced demand disruptions which impacted the farm trade and supply chain.
Even as the Centre has offered a two-month moratorium till May 31, 2020 for crop loan repayments due on March 31, 2020, the farmers have sought an extension as they reel under severe cash crunch.
Last week, the Gujarat unit of Bhartiya Kisan Sangh (BKS) has written to the Union Finance Minister Nirmala Sitharaman seeking an extension in the moratorium for crop loan repayments.
“After assessing the ground situation and the feedback we have received from the farmers, the normalcy may take longer than expected to return due to the coronavirus outbreak. And farmers will not be able to sell their produce at the APMCs or at the MSP operations in the given two-months moratorium period. Therefore, it is necessary to extend the loan repayment period from May 31, 2020 to March 31, 2021,” said the letter by Vitthal Dudhatara, President, BKS-Gujarat, which is also addressed to Gujarat Chief Minister Vijay Rupani besides Union Agriculture and Farmer Welfare Ministers.
No burden on banks
Dudhatara also explained the rationale behind extension of the repayment period, as it would put no additional burden on the banks. “Since most of the farmers repay the loan amount by the due date and within a couple of days, take the same loan amount for the next year. The farmers don’t pay any interest since the Centre and State governments have already provided interest subsidy of 3 per cent and 4 per cent respectively. Therefore, it would put no additional burden on the banks to merely extend the repayment period till March 2021,” he added.
He also pointed out that farmers, who have cleared their outstanding crop loans before the lockdown, are being denied loans by the banks for the next crop cycle. “This is unfair for the farmers who are desperately in need of money to procure seeds, equipment for the upcoming sowing season,” Dudhatara said seeking an early resolution to the issue.