COVID loan relief still stalled; Farmers left in limbo

Kottayam: The state government is yet to take a decision on the agricultural loan relief announced during the COVID-19 period, leaving lakhs of farmers in uncertainty. According to farmers’ organisations, nearly 2.5 lakh farmers are still awaiting loan relief after facing severe financial distress during the pandemic. However, the extension of deadlines has stalled as the Finance Department has not granted approval.

As per the scheme, loans taken for up to 5 years in Idukki and Wayanad districts, and up to 9 years in other districts, are in fact eligible for relief. Currently, loans taken until August 31, 2020, in Idukki and Wayanad, and until August 31, 2016, in other districts are considered for relief. Although the application deadline had expired, it was later extended until December 31. In Idukki alone, nearly 36,000 applications remain pending from the earlier deadline.

Despite applications being invited again, citing that many farmers could not apply during the fixed period, the response was poor. Out of the three-month extended period, only 2,215 applications were submitted. Farmers are demanding that applications be accepted at least until December 2022 across all districts. The scheme considers loans up to ₹2 lakh availed from primary agricultural societies. Once an application is approved, half the loan amount will be borne by the government and the rest by the farmer.

However, even in the applications approved by the commission, the government’s share is still pending. Of the ₹747 crore in the recently approved relief, only ₹346 crore has been released, while ₹401 crore is still pending.

Though the government’s share is meant to be paid by the state, the entire loan remains in the farmer’s name. Until the government disburses its portion to banks, such loans continue to be treated as NPAs (Non-Performing Assets), damaging the farmers’ CIBIL scores. To avoid this, many societies are forcing farmers to repay the full amount upfront, in a promise to return the government’s share once it is received.

Agriculture Minister P Prasad has assured that the issue of pandemic-period loans will soon be brought under the commission’s scope. Commission member K.R. Rajan stated that sittings are being held continuously to address pending applications. However, James Vadakkan, who is engaged in legal battles over agricultural issues, criticised the government, saying that the failure to invite applications in a timely manner was a serious lapse. He added that a detailed report compiled from all districts will soon be submitted to the government.