A farmer on drought-hit land.
Credit: DH Photo
The state government has set the process in motion to waive interest on farm loans, disbursed by the cooperative societies/banks, for those who have repaid the principal amount in full.
The Co-operative department’s notification stated that the state government had decided to write off interest on all farm loans, including of those farmers who have defaulted this fiscal.
The circular further stated that the interest accrued on farm loan up to Rs 10 lakh, with interest rate of 12%, will be waived.
Chief Minister Siddaramaiah had announced an interest waiver on farm loans for those who have repaid the principal amount in full. The announcement was made on the concluding day of the winter session of state legislature in Belagavi last month.
According to the circular, as many as 56,879 farmers have defaulted on their repayment of medium term and long term agricultural loans borrowed from co-operative financial institutions. “They have defaulted on Rs 586.11 crore worth of loans and accrued interest on these defaulted loans stand at Rs 440.70 crore till the financial quarter ending December 31, 2023,” the circular stated.
According to the circular, the farmers defaulted in their payments due to severe drought and they are facing severe difficulty in raising fresh loans to take up farming activities.