Bankers in K'taka agree to reschedule term loans of grape, pomegranate growers

The State Level Bankers' Committee (SLBC) for Karnataka today unanimously passed a resolution giving effect to rescheduling of term loans amounting to Rs 1,357 crore including principal and interest to debt stressed grape and pomegranate growers. The banks have also agreed to extend fresh line of credit irrespective of closure of the previous loan account to farmers.

The bankers agreed after the intervention of the state chief secretary Kaushik Mukherjee and minister for law T B Jayachandra at the 128th quarterly meeting of SLBC, here today. Mukherjee stressed that it was not sufficient to just reschedule the loan accounts but it was important to extend fresh line of credit so that the growers could take up plantation of these two fruits crops all again.

Lat Krishna Rau, additional chief secretary and development commissioner requested the banks to consider the condition as natural calamity and extend fresh credit to farmers for taking up new cultivation.

The farmers across northern districts have suffered huge losses owing to bacterial blight disease in pomegranate crop and drought and floods in grape growing regions since 2004.

It may be noted banks have been denying for the past year fresh crop and terms loans to grape, pomegranate and arecanut growers for non-repayment of earlier loans.

"SLBC will become a talking shop if bankers continue to deny fresh loans to growers who had lost crops due to consecutive droughts and diseases. Growers are not wilful defaulters and they need help from the banks to continue in the farming," he said.

Krishna Rau told bankers, "Mere waiving of interest on loans will not help farmers and banks have to reschedule existing loans and grant fresh loans without imposing conditions."

Preetham Lal, SLBC convenor and General Manager, Syndicate Bank, said that banks would reschedule old loans and charge nine per cent interest on crop loans up to Rs three lakh and 10.5% on term loans.

The SLBC meeting also deliberated on the plight of arecanut growers, who have suffered huge losses due to yellow leaf diseases in growing regions of Dakshina Kannada, Shimoga, Chikmagalur and other districts. Outstanding loans of arecanut growers stood at Rs 109 crore.

Pomegranate and grape crops have been affected in 13 districts and 11 districts respectively. Grapes are grown in about 16,286 hectares. Pomegranate is grown in 14,649 hectares with an annual production of 146,000 tonnnes and the state ranks second in the country.

Karnataka accounts for about 27% of India's grape production at 330,000 metric tonnes and is behind Maharashtra. During drought years, farmers were forced to bring water from far away places in tankers to save their orchards as the ground water reserve depleted alarmingly in northern districts.

Jayachandra suggested that all banks have to charge uniform rate of interest on crop and terms loans in all districts. On loan waiver, he said, "The state government will take up the matter with the Central government and discuss on the possibility of waiving loans to these growers." However, he did not commit any deadline for doing the same.

Growers producing three commodities had appealed to the State and the Centre to bail them out from the financial distress suffered following the loss of crop due to drought and disease for the last few years. Growers demanded waiver of bank loans. But the SLBC has no powers to decide on waiver of loans. Only the State and Central government has powers to waive loans if they reimuburse the amount to banks, Jayachandra added.