The Hindu Business Line : AP seeks 7-year interest-free moratorium on crop loan dues

The Chief Minister, Dr Y.S. Rajasekhara Reddy, having a word with the Nabard Chairperson, Ms Ranjana Kumar, and the Andhra Bank CMD, Mr T.S. Narayanasami, at the State-level Bankers' Committee meeting in Hyderabad on Monday. The Finance Minister, Mr K. Rosaiah, is also seen. - H. Satish

Hyderabad , June 7

THE Chief Minister, Dr Y.S. Rajasekhara Reddy, today appealed to the bankers to consider announcing a moratorium on crop loan dues for a period of seven years without charging any interest during the period, since mere rescheduling of crops loans would not help the State farming community currently in deep distress.

Addressing the State Level Bankers' Committee (SLBC) meeting here on Monday to release the State Credit Plan for 2004-05, Dr Reddy said sizeable rescheduling by the banks was either in the form of book adjustments or being used by the farers towards clearing the dues of money lenders in the rural areas.

Stating that substantial crop loans were not utilised, the Chief Minister said rescheduling would increase the debt burden on the farmers. Instead, the bankers should consider announcing a moratorium on dues and also issue fresh loans.

In case the banks are not in a position to extend adequate loans, they can consider reducing the size of the loans in such cases, he said.

Pointing out that the cooperative banks in the State were in a worst financial condition with sharp fall in recoveries, Dr Reddy asked the bankers and State government officials to look into their revamp. He sought the support of the National Bank for Agriculture and Rural Development (Nabard).

Referring to the problems of the shrimp farmers in the coastal districts, he requested the banks to sanction loans up to 75 per cent by pledging their produce in cold storages. While the total production of shrimp was expected at around 21,000 tonnes, valued at Rs 872 crore, the value of the shrimp to be placed in cold storages was estimated at around Rs 436 crore.

The Chief Minister asked the Nabard to take lead in participating in the lending process for pending irrigation projects, which required about Rs 46,000 crore. Each bank should also help in completing at least one irrigation project in the next three to four years.

Reacting to the suggestion of the Nabard Chairperson, Ms Ranjana Kumar, on the need for constant review of agricultural credit, Dr Reddy announced appointing a Task Force to be headed by the State Chief Secretary for the purpose of constant monitoring of the credit flow to agriculture.

More Stories on : Farm credit | Andhra Pradesh

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