**Bhubaneswar: ** Chief Minister Naveen Patnaik on Monday sought intervention of Prime Minister Narendra Modi to keep the interest rate on Medium Term (Conversion) loans at par with the crop loan and also extend interest incentive of 3 percent admissible on crop loans to the Medium Term (Conversion) loans.
The Chief Minister in his letter to the PM has mentioned, “In order to help the farming community suffering the crop loss, my Government has already initiated proactive measures to provide relief to the affected farmers promptly. As a part of the package announced for the farming community, it has been decided to convert the crop loan advanced during Kharif, 2017 season in the affected areas as Medium Term (Conversion) loans. In case of crop damage between 33% and 50%, the crop loans can be converted into Medium term (Conversion) loan repayable with in a period of two years with a moratorium of one year. Similarly, where the crop damage is 50% and more, the conversion facility of the crop loans can be allowed for a maximum period of five years with one year moratorium.”
The Chief Minister has also cited, “The Union Government provides interest incentive at 3 percent to the prompt paying farmers in respect of crop loans, which is not made available in case of conversion of such crop loans in the event of occurrence of natural calamities. As a result, the interest rate on the converted loans remains at a higher rate, which is at present 11.20%. Similarly, the interest on crop loans is not subsidized as interest subvention for the same is not available. In my opinion, when crop loans are converted into Medium Term loans, the interest rate should remain at par with the crop loans, Similarly, the incentive made available to the prompt paying farmers for crop loans should also be extended to the Medium Term (Conversion) loans to provide relief to the farmers affected due to drought and pest attack.”