The Punjab government has expressed its apprehension over the Centre’s recent move asking it to defer repayment of agricultural loans taken by the farmers in the current rabi season by three years as relief following the bad weather leading to loss of crops.
A letter by chief minister Parkash Singh Badal to Prime Minister Narendra Modi has raised the issue, asking the former as to who would pay the interest levied on the loans during this period.
“It is suggested that the Centre should provide interest subsidy to the affected farmers, ensuring that they do not carry any interest burden during the extended period of repayment of their debt for the rabi season 2014-15. It will help reduce, if not totally mitigate, the economic miseries of the farmers,” Badal told Modi, accepting the Centre’s offer for deferring the farm loan repayment.
The wheat crop in the region faced untimely rain, hailstorm and strong winds in February, March and April, leading to fall in yield as the crop got damaged across the state. Following this the state sought help from the Centre. According to a senior agriculture department official, in case the loan repayment is deferred and interest is not waived, it would not help farmers as they might have to pay 70% of the principal amount after three years and the entire crop would go into paying the interest.
Punjab apprehends a fall of 5-7% in production as compared to the previous wheat season. In the last season, the production touched 175 lakh tonnes; this season, it is expected to come down to 167 lakh tonnes with a procurement target of 125 lakh tonnes.
To compensate the loss, Punjab has demanded a bonus of Rs 100 per quintal from the Centre. “We are expecting a fall of about 8 lakh tonnes in the production, which means the farmers will suffer a loss of Rs 11,600 crore, calculated on the basis of the MSP of Rs 1,450 per quintal. To compensate the loss Punjab has demanded a bonus of Rs 100 per quintal,” said an official of the agriculture department.
“I request that a bonus of Rs 100 per quintal over and above the MSP of wheat may be provided to compensate the farmers who are already in distress due to the reduction in yield and the likely deterioration of quality of produce due to unseasonal rain,” said Badal’s letter to Modi.