Agri Business

Maharashtra seeks refinance of agri loans to tune of ₹2,000 crore

Rahul Wadke Mumbai | Updated on January 24, 2018 Published on June 23, 2015

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Asks Nabard, cooperative banks for assistance; move will lead to extension of repayment period

In view of large-scale crop failures in 2014, the Maharashtra government has asked National Bank for Agriculture and Rural Development (Nabard), Maharashtra State Cooperative Bank and other cooperative banks to refinance crops loans to the tune of ₹2,000 crore.

Due to last year’s irregular monsoon and untimely rains during winter, farmers across the State had to suffer massive crops losses. With refinancing of loans, the farmers’ repayment period will be extended from one year to five years. The State government has also decided to support the refinancing by underwriting the interest cost of ₹300 crore. In effect, farmers can take fresh loans for current Kharif season without worrying about the payment of old loans. Loan repayment will start only in 2016.

A senior government official told BusinessLine that out of the total amount of ₹2,000 crore, Nabard is expected to refinance 60 per cent of the amount, while Maharashtra State Cooperative Bank will shoulder 15 per cent of the amount; and the rest will be the responsibility of smaller banks, the official said.

Surveys carried out by the Agriculture and Revenue Departments reported that out of 40,000 villages in the State, 23,811 had reported a paisewari of less than 50 paise in the Kharif season. In the Rabi season, 1,200 villages had reported the same paisewari. Last year, large areas of Marathwada, Vidarbha and some districts of northern and western Maharashtra had reported crop failure after both seasons.

Paisewari is a term for describing crop yield, where 100 paise is set as a unit for the yield. A paisewari of less than 50 paise signifies massive crop losses.

The official added that in 2014 farmers have not been able to even recover the cost of cultivation in the affected areas. They are suffering for the last three years due to vagaries of the weather. If new crop loans are not disbursed on time then it could lead to a law and order situation. The final shape to the refraining package would be given at the State-level bankers committee meeting, which will be held on Wednesday.

Published on June 23, 2015
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