Financial Daily from THE HINDU group of publications
Tuesday, Nov 11, 2003
Financial Daily from THE HINDU group of publications Tuesday, Nov 11, 2003 |
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Agri-Biz & Commodities
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Coffee Planters' body renews demand for waiver of interest on coffee loan Our Bureau
Bangalore , Nov. 10 THE Karnataka Planters' Association (KPA) has renewed its demand for the waiver of entire interest on the special coffee term loan (SCTL) for the first year of the three-year moratorium period. Speaking at a press conference ahead of the KPA's annual conference, the Chairman, Mr Cherian Philip, said in view of the aggravating coffee crisis, mainly due to low global prices coupled with drought and widespread infestation of white stem borer disease in the main growing regions of Karnataka, the Union Government should waive the interest till June 30. It has also suggested that the Centre should levy four per cent interest during the remaining two years of moratorium that is 2003-04 and 2004-05, as the growers were finding it very difficult to repay the interest on the loans availed due to un-remunerative prices. The Government should further bring down the interest rate to six per cent per annum for the remaining period of rephasement. As part of the relief package announced by the Centre under the loan scheme, coffee loans had been rescheduled for a period of 9-11 years, which the association now wanted it to be extended to 18 years including the three-years' moratorium, Mr Philip said. According to sources, the estimated total loan outstanding to the coffee sector is to the tune of Rs 1,400 crore, while the interest burden on the industry is pegged at close to Rs 250 crore. The Karnataka Government has already waived off Rs 39.26 crore on interest on loans taken by growers in Chikmagalur, Hassan and Kodagu districts. "The relief package has turned out to be more beneficial to the banks rather than the growers as it had prevented the accounts from being classified as non performing assets (NPAs) by the banks. The growers were now saddled with the responsibility of paying the interest within the stipulated period, failing which the loans would be treated as NPAs," Mr Philip said. He regretted that some of the banks in the plantation districts were not aware of the RBI decision to defer the interest for one year.
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