The Hindu : Tamil Nadu / Chennai News : Rs. 645-crore debt relief package for farmers

Online edition of India's National Newspaper
Saturday, Sep 17, 2005

Tamil Nadu

Tamil Nadu - Chennai

Rs. 645-crore debt relief package for farmers

Special Correspondent

Will benefit 7.25-lakh ryots who have taken crop loans

CHENNAI: Chief Minister Jayalalithaa on Friday announced a Rs. 645-crore "comprehensive debt relief package" for 7.25-lakh farmers who had obtained short-term crop loans from cooperative institutions.

In a statement, she said, "I have ordered waiver of accumulated interest of Rs. 402 crores as on March 31, 2004. This will be a massive debt relief to the farmers. I have also decided that interest accruing up to June 30, 2006 on the principal amount as on March 31, 2004, shall be waived. This additional amount of relief to farmers will be Rs. 243 crores for the period beyond March 31, 2004."

Ms. Jayalalithaa said the Government would make good the amount to cooperative credit institutions.

"The Government will provide this amount in five equal instalments over the next five years. This will ensure that lending activities of cooperative credit institutions do not suffer for want of funds."

She hoped farmers would take up operations with renewed confidence in the current season. She recalled the Government's Rs 433-crore debt relief packages since 2001.

It had also reimbursed Rs. 34.24 crores towards the Interest Incentive Scheme of cooperative credit institutions "left unpaid by the previous Government."

Farmers had already benefited from the rescheduling of loans by the State Government on March 31, 2004 in the context of the continuous drought, she said.

Sugarcane price

In another statement, Ms. Jayalalithaa said though the Centre had announced that the statutory minimum price for sugarcane for the 2005-2006 season would be Rs. 795 a tonne, linked to an average of recovery of nine per cent, the Tamil Nadu Government had decided that the State Advised Price (SAP) would be Rs. 1,014. It decided to implement a new policy of fixing SAP, taking note of the Supreme Court decision. The Government had also decided that the minimum price to be paid by sugar mills — cooperative, public sector and private — should be Rs. 1,014 a metric tonne even if the recovery rate was below an average of 9 per cent. It would give farmers an incentive of Rs. 88 a tonne for every increase of one per cent over and above the average recovery of nine per cent.

Additional cost for mills

The additional cost for cooperative and public sector sugar mills to ensure that remunerative prices are paid to sugarcane farmers will be Rs. 133.87 crores, Ms. Jayalalithaa said, announcing a Rs. 75-crore support package to enable the mills adhere to the new policy. "My Government is committed to ensuring that farmers get the remunerative price as per the new policy even if it takes some more time for the sugar industry to completely restructure itself," she said.

Printer friendly page
Send this article to Friends by E-Mail

Tamil Nadu