MP govt to disburse interest free loans to 3.5 mn farmers

But farmers who have already availed the scheme in a fix

Delayed monsoon is adding to the woes of farmers in Madhya Pradesh. While the govt is to start another session of short-term farm loan distribution to farmers, some who have already availed the scheme have little option but to turn to money lenders.

Madhya Pradesh disburses zero percent farm loan to farmers through state-owned cooperative banks. Normally, a farmer is given Rs 100,000 through Kisan Credit card to meet contingencies.

According to the state government, 3.4 million farmers have obtained soft farm loans through the scheme. But most farmers in Malwa districts of Bhopal, Vidisha, Rajgarh, Ujjain, and Mandsaur said they have already consumed the credit available in their Kisan Credit cards. 

"I do not have funds now, the entire soya crop was lost due to heavy rains, while this year the dry spell seems to be playing havoc," said Param, a farmer in Aalot village of Ratlam district. 

Similar is the case of Ummed Singh in Agar-Malwa. He is banking upon a Sahukar (moneylender) for a farm loan of Rs 25,000 to meet Kharif expenses at an exorbitant loan available at 120% interest.

"Interest rates are very high at moneylenders. These days they give loans for a short-term of only three months, if I fail to repay there is risk of losing the land," he said.

According to officials, state government will soon start another session of short-term farm loan distribution at zero per cent interest. An amount of Rs 15,000 crore will be disbursed to the farmers and the state is expecting to cover nearly 3.5 million farmers under the scheme.

An amount of Rs 421 has been earmarked for the purpose in the recently proposed budget. The state had distributed an amount of Rs 12,450 crore the soft short-term farm loan to as many as 2.8 million farmers during 2013-14.

Soya sowing has been delayed to an irrecoverable extent in districts of Mandsaur, Ujjain, Shajapur, Agar Malwa, Sehore, Bhopal and Indore.