As the kharif season coming to an end, a majority of farmers in Andhra Pradesh and Telangana have ended up taking loans from private lenders. With both the Governments delaying the repayment of loans as promised in their respective manifestoes, the banks have refused to disburse loans.

Though they have targeted to disburse about Rs 50,000 crore worth crop loans, the farmers actually got only a fraction, forcing them to depend on private lenders at exorbitant interest rates. In Telangana alone, the farmers took loans tyo the tune of Rs 25,000 crore from private lenders with interest rates ranging from 24 per cent to 36 per cent, Sarampally Malla Reddy, national Vice-President of All-India Kisan Sabha, told Business Line.

The biggest loss for farmers is that they would not get any insurance cover as they took loans from non-institutional sources.

According to State Level Bankers’ Committee (SLBC) data, out of the targeted disbursement of Rs 3,178 crore agricultural term loans during the Kharif season in Andhra Pradesh, only Rs 1,188 crore loans could be disbursed, comprising 37 per cent of the target.

The performance of short term crop production loans for the Kharif was much lower. Out of a target of Rs 25,888 crore loans, only 21.60 per cent could be achieved amounting to Rs 5,593.

As against the annual disbursement target of Rs 77,894 crore for the year 2014-15 under priority sector, credit flow was only to the tune of 14.4 per cent while in agriculture it was only 13 per cent.

According to S K Kalra, Executive Director of Andhra Bank, the poor performance of banks was due to the factors beyond their control.

``The farming community is not coming forward for repayment/renewal of loans despite efforts made by the banks to convince them to get their loans reviewed pending credit of debt waiver amount announced by the Government,’’ he said on the sidelines of SLBC meeting held here on Wednesday.

The credit off-take especially in agriculture was directly lined to repayment and recycling of funds which had mostly happened during the last two quarters in the State, he added.

Farmers cry foul

“Now, they are saying that they will extend the deadline (to disburse loans) by 15 days, but considering the long festive season farmers can expect little from this gesture,” Malla Reddy said.

“Seeing no option left for farmers, private lenders are increasing the interest rates irrationally. Lenders in Adilabad are charging as high as 36 per cent,” he said.

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