Bhopal: The Madhya Pradesh government has plans to allow farmers to return only 90 percent of their crop loans from 2015-16, it was officially announced on Monday.
While addressing a national conference on crop insurance here, Madhya Pradesh Chief Minister Shivraj Singh Chouhan said the state government was already doling out loans at zero percent rate of interest.
"We have been giving crop loans at zero percent rate of interest. Now we want to give the crop loans at 10 percent discount because there is no alternative to farming. We cannot grow our wheat, rice or chana in factories," said Chouhan.
About 40 percent of the farmers who receive crop loans are going to be eligible for this beneficial scheme.
However, Madhya Pradesh withdrew the bonus it gave to farmers for paddy, wheat and maize over and above the Minimum Support Price (MSP) as there is high production of these crops in the state.
Of about Rs.12,000 crore worth of crop loans disbursed in Madhya Pradesh, about 40 percent is given through the cooperative banking system.
On the destructive hailstorm which forced three farmers to commit suicide in three days in March, Chouhan said, "There have been cases and I will not shy away from the reality. I must tell you, the Madhya pradesh government was first to provide compensation to the families."
He said: "In the last financial year, Rs.3,300 crore were paid as compensation to the soyabean farmers."
Stressing the need for solid and strong insurance policy, he said: "Madhya Pradesh has in the last seven years increased its irrigated land cover... but still a lot has to be done..."
"Natural calamity, mehangai dayaan (price witch), production cost and facilities available are some of the challenges which have to be addressed. For that, we need a strong and proper insurance scheme for farmers," he added.
"We will give 10 percent subsidy to the cooperatives when they collect 90 percent of the loan amount given to the farmers. This will also incentivise the cooperatives for better recovery of the loans distributed," Rajesh Rajora, principal secretary, Madhya Pradesh, told IANS.
