Farmers want agricultural loan to be de-linked from CIBIL score as it is a hindrance to securing financial advance or assistance to take up farm-related projects.
The score generated by Credit Information Bureau (India) Ltd. has details of an individual’s track record pertaining to credit history and repayment besides default, and is shared by financial institutions and lending agencies before sanctioning a loan.
The demand to delink CIBIL score from agricultural loans was raised at a meeting convened by the district administration of Mysuru to redress farmers’ grievances, in Mysuru on May 6.
Kurubur Shanthakumar, president, Karnataka State Sugarcane Cultivators’ Association, said farmers are trapped in a perennial cycle of crop loss due to floods or drought, which affects timely repayment. This gets reflected in the CIBIL score and blocks a farmer’s access to institutional credit. He suggested a policy change to delink CIBIL score from agricultural loans.
Deputy Commissioner Bagadi Gautham promised to write to the Lead Bank and others concerned, drawing their attention to the farmers’ demand and also submit a report to the Karnataka Government.
A section of farmers drew attention to the crop cycle in case of sugarcane, which stretches for 18 months from cultivation to harvesting while the loan cycle is for 12 months. This put farmers under duress to repay the loan and the interest even before they receive their dues from sugar mills. They want a change in the loan cycle from 12 months to 18 months.
Though Prime Minister Narendra Modi had stated that all farmers should receive the money for their produce within 14 days of procurement, the reality is different. Farmers claim that the delay in crediting the amount due to cultivators is adding to their interest burden.
When a farmer from Mysuru taluk raised the issue of crop loss due to unseasonal rain and how the amount released did not cover the actual loss, the Deputy Commissioner reiterated the importance of securing insurance cover and opt for crop insurance as a safety net.
The attention of authorities was drawn towards alleged anomalies in the existing system which is having a negative bearing on farmers’ income. Farmers alleged that there is a tendency to bunch high-yielding variety of sugarcane with low-yielding one to reduce the overall sugar recovery, which was resulting in loss to farmers.
Hathalli Devaraj and other farmers pointed out that since sugar recovery forms the basis for fixing the rate per ton of sugarcane, they demanded a check on the alleged malpractice.
With regard to RBI policy on timely repayment of loan and interest subvention, which helps reduce the interest burden on farmers, officials were told that certain banks were not following the norms and depriving farmers of the benefit.
The DC instructed Lead Bank officials to investigate the allegation and take appropriate measures.
Over 200 farmers from Mysuru and surrounding regions participated in the meeting, along with Mysuru ZP CEO B.R. Poornima, Superintendent of Police R. Chetan, and Joint Director of Agriculture Mahanteshappa.
