Following the waiver of loans to farmers announced in the Union budget, agriculture minister Sharad Pawar has appealed to farmers all over the country not to repay loans borrowed from illegal moneylenders. Addressing reporters in Mumbai today, he said, “I will appeal to state governments to support farmers who have been caught in the trap of illegal moneylenders. There can be some machinery set up at the block level through the police or the revenue department to take action against illegal moneylenders and protect farmers from harassment.”

He noted that 81.89 per cent of India’s farmers have only up to two hectares of land and qualify for the 100 per cent loan waiver.

He said that the Government would be depositing Rs 40,317 crore in various financial institutions such as banks before the end of fiscal 2007-08 towards repayment of loans taken by marginal farmers. The decision to focus on small and marginal farmers was taken following a series of meetings between Prime Minister Manmohan Singh, the agriculture and finance ministers, the RBI Governor and NABARD.

“It has been revealed to us that small and marginal farmers take loans for crop, for investments such as digging wells, purchasing equipment, long-term crop loans for horticulture such as orange and grape orchards, for buying livestock and aqua-culture,” Pawar explained.

He added that by June, the loan account of small and marginal farmers would be cleared and they would be eligible for fresh credit.

“Only 40 per cent of farmers are eligible for credit from financial institutions (FIs). There are various reasons for this, such defaulting on loan repayments, problems in land records. It has been the government’s aim to double the percentage of farmers eligible for loans,” he pointed out.

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