CHENNAI: Recovery of crop loans, issued by the primary agricultural cooperative banks in the State, has almost come to a halt. Farmers are not ready to repay the loans, as they expect some concessions from the new government, a cooperative bank official says.

The Dravida Munnetra Kazhagam has promised in its election manifesto that if voted to power, it will write off the cooperative crop loans advanced to small and marginal farmers. Though the All-India Anna Dravida Munnetra Kazhagam has not made a similar promise, farmers are hopeful of concessions, such as interest waiver.

All-India Cooperative Bank Employees Federation general secretary P. Balakrishnan told The Hindu that the total loan outstanding to PACBs was Rs. 6,500 crore, including Rs. 3,750 crore in principal and Rs. 645 crore in interest relief announced in September last by the present government. Besides, it had to repay Rs. 500 crore to borrowers who had repaid the loan in time. So the new government would need Rs. 7,000 crore if it wanted to waive all the loans.

The official said farmers started repaying the loans, thanks to the normal crop after three years of drought. But after the parties promised concessions, they virtually stopped repayment.

Of the 4,645 primary agricultural cooperative banks, 200 had been closed, and another 1,150 were in the doldrums. The banks should be compensated at once if any decision on loan waiver was taken, Mr. Balakrishnan said.

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