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Karnataka grape growers seek Rs 1,169 crore loan waiver

The growers have submitted a proposal to Union Agriculture ministry for waiver of principal and interest

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Mahesh Kulkarni Bengaluru
Last Updated : Mar 11 2015 | 10:53 PM IST
Grape growers from Karnataka, the second largest producer of grapes, have asked the agriculture ministry to bail them out from the financial distress they have suffered following loss of crop due to drought and hailstorms, between 2004 and 2012. They have submitted a memorandum to the Union agriculture minister for a loan waiver of Rs 1,169 crore for both grape and pomegranate crops.

From 2004, grape growers have been facing shortage of water for their crops. The situation worsened in the recent years as the entire state reeled under severe drought. Almost 90 per cent of the loans issued by nationalised banks and cooperative banks have turned into non-performing assets, while 70 per cent of them have turned into doubtful assets. The total amount (both principal and interest) runs into Rs 1,169 crore, Abhaykumar S Nandrekar, President, Karnataka Grape Growers Association (KGGA), told Business Standard.

In their memorandum submitted to minister of state for agriculture Sanjeev Kumar Balyan in New Delhi on Wednesday, KGGA and four MPs from the grape-growing region of the state demanded a special financial package to bail growers out from financial distress.

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Unseasonal rains in the recent days has added to the woes of grape growers. Grape crops over an estimated 2,000 hectares were damaged by the hailstorm in Vijayapura, Bagalkot, Bidar, Koppal, Belagavi, Kalaburagi districts and the damage is estimated to be around Rs 400 crore, Nandrekar said.

The delegation comprised of Members of Parliament Ramesh Jigajinagi, P C Gaddigoudar, Suresh Angadi, and Bhagavantha Khooba. They demanded the establishment of a National Horticulture Mission branch in the north Karnataka region and a branch of National Centre for Grapes Research at Vijayapura.

Over the last decade, farmers have been forced to bring water from faraway places by tankers to save their orchards as the water table has fallen alarmingly in the northern districts like Bagalkote, Vijayapura, Koppal, Belagavi, Bidar, Kalaburagi and other districts. Even in 2006-07 grape growers had requested the then agriculture minister Sharad Pawar to waive their loans (both principal and interest) along with Vidarbha farmers. But the government did not yield to their demands.

It would be very difficult for the growers to survive and retain their crops if the government does not waive farmers’ loans immediately, he said.

Karnataka accounts for an estimated 27 per cent of India’s grape production at 330,000 tonnes and is behind Maharashtra which contributes to 63 per cent of the national output. The state is known for growing popular varieties like Thompson, Sharad, Sonaka, and Tas-e-Ganesh among others, which have huge demand in overseas markets. About 70 per cent of the production is converted into raisins (dry grapes).

As a result of the severe drought for the last few years, the area under grapes in Karnataka has declined to 13,569 hectares from 18,100 hectares in 2010. Of this, about 8,000 hectares area has been affected by severe drought causing hardship to farmers.

The Karnataka government recently submitted another proposal to the Central government asking for the release of Rs 426 crore with a request for payment of 50 per cent, while the state government and farmers will have to bear 25 per cent each, Nandrekar said.

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First Published: Mar 11 2015 | 8:47 PM IST

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