In view of the distressed condition of the farmers hit by recent cyclone Phailin, the State Government has requested the Union Government to turn the Short Term Crop loans (STCls) to Medium Term Crop loans (MTCls) and allow additional interest incentive of 3 per cent for the MTCls also, like STCls.
Chief Secretary JK Mohapatra, in a missive to Secretary Financial Services in the Ministry of Finance Rajiv Takru, has pleaded for this.
Mohapatra has stated that farmers of 18 districts have sustained crop loss of more than 50 per cent, mostly paddy and vegetable crops. He has said the State Government has enhanced the Rabi programme for this year by almost 30 per cent more than that was last year and to achieve the target the State Government has announced provision of fresh loans to convert STCls to MTCls.
He has said that under the Interest Subvention Scheme of the Union Government, STCls up to `3 lakh is sanctioned for a maximum period of one year at 7 per cent interest per annum and there is also additional interest incentive at 3 per cent for making prompt repayment of STCls. Besides this, 2 per cent interest subvention is also provided by the State Government on STCls.
The STCls are needed to be turned as MTCls by banks for a period of three years. However MTCl is not available to the farmers at the rate of interest applicable for STCl.
The Chief Secretary has impressed upon Takru that the farmers would have repaid their loans on or before the due dates had the cyclone and subsequent floods not damaged their crops.