A day after the Central Government asked the State Government to submit its memorandum for drought assistance, Chief Minister Naveen Patnaik on Friday shot a letter to Union Finance Minister Arun Jaitley requesting him to reduce the interest rate on crop loans in view of the widespread crop damage due to drought in the State.
The CM urged the Union Minister to trim down the interest rate and extend the interest incentive of 3 per cent admissible on farm loans to Medium Term (Conversion) loans considering the widespread damage to crops due to the drought.
“The Union Government provides interest incentive at 3 per cent to the promptly paying farmers in respect of crop loans. This facility, however, is not made available in case of conversion of such crop loans on account of natural calamities as a result of which, the interest rate on the converted loans remains at a high level putting an additional financial burden on the farmers.
As crop loans are converted into medium-term loans, the interest rate should remain at the same level instead of charging higher rate of interest. Similarly, the incentive made available to prompt paying farmers of crop loans should also be extended to the Medium Term (Conversion) loans to provide relief to the affected farming community,” Patnaik said in the letter.
“Scanty and erratic rainfall in large parts of Odisha have resulted in widespread damage of the standing crops. My Government has already initiated proactive measures to combat the situation and to provide relief to the farming community. As part of the package announced for the farming community, we have decided to convert the crop loans advanced during Kharif, 2015 season as Medium Term (Conversion) loans. In case of crop damage between 33 per cent and 50 per cent, the crop loans shall be converted to Medium Term (Conversion) loans repayable 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 facility of the crop loans can be allowed for a maximum period of five years with one year moratorium,” the CM added.
Notably, over 33 per cent crop loss has been reported in 139 blocks in 21 districts in the State as per the Government’s eye estimate reports.