Odisha govt announces interest free crop loan up to Rs 1 lakh for farmers

Bhubaneswar (Odisha) [India]: Odisha State Cooperation Department on Friday said that the State Cabinet had approved the provision of Rs 5700 crore for implementation of the State sector Scheme “Interest Subsidy-Subvention” to the Cooperative Banks / PACS for five years from  2023-24 to 2027-28 to ensure adequate credit flow in the agriculture at an affordable rate of interest to the farmers in the State.

According to an official release, the state government has now decided for dispensation of crop loans up to  Rs 1 lakh at 0 per cent interest rate per annum (Interest-free loan) from 1st April — 2022 and for crop loans above Rs 1 lakh to Rs 3 lakh, the applicable rate is 2 per cent for prompt paying farmers.

Earlier, interest-free crop loan was being provided up to the limit of Rs.50.000/- under the KALIA scheme. During the year 2022-23, as many as 32.43 lakh small and marginal farmers availed crop loans from Cooperative Banks / PACS within Rs. 1 lakh at a ‘zero’ per cent interest rate per annum.

In order to compensate for loss sustained by the Cooperative Banks/PACS on the lending of crop loans at a directed rate of interest as stipulated by the Government, the Government of Odisha is providing interest subsidy/subvention to the Cooperative Banks/PACS.

The State of Odisha has a three-tier “Short Term Cooperative Credit Structure (STCCS) with Odisha State Cooperative Bank at the Apex (State) level, 17 Central Cooperative Banks at the Middle rung (District level) and 2710 Primary  Agricultural Cooperative Societies (PACS) and Large Sized Adivasi Multipurpose Cooperative Societies (LAMPCS) at the grassroots level have been playing a vital role in dispensation of agricultural credit, the department said.

The Cooperative has achieved significant strides in Crop loan dispensation from Rs.438.36 crore to 6.40 lakh farmers in the year 2000-01 to Rs.16683.57 crore to 34.57 lakh farmers in the year 2022-23.

At present the Cooperatives provides about 55 per cent of the total Crop loans dispensed to the farmer in the State as against the National average of 17 per cent.

Odisha is an Agrarian State. Growth in production and productivity in agriculture can be achieved only through the flow of the required amount of funds for investment in agricultural operations.

Most of the farmers in the State belong to the small and marginal category with small and marginal land holdings. These farmers do not have the required capital resources for their agricultural operations so they require to avail hassle-free crop loans from financial Institutions.

For agricultural operation availability of adequate and hassle-free credit at a cheaper rate to farmers has been the top priority of the State Government.

To ease off the interest burden of crop loans on farmers, the State Government introduced an interest subvention Scheme to provide Short Term Credit to farmers at subsidized interest rates for their farming operations.

It helps in the growth of production and productivity and enhancement of income of farmers from farming activities leading to a better livelihood, the department said in its release.