BJP 'Kisan Morcha' chief Virendra Singh Mast also pitched for different states, including his party-run Maharashtra, to follow the UP government's decision and waive loans of marginal farmers.
Asked about the RBI governor's warning against such loan waivers, the Lok Sabha member told reporters that banks are commercial bodies driven by profits.
"Banks are unconcerned with human sensitivity but it is a priority for governments. If the RBI governor checks his books he will find that almost 95 per cent of the loans taken by farmers are recovered," he said.
He observed that loan waiver schemes "engender moral hazard".
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To a question about demands for similar waivers in other states, he said whether Maharashtra or Tamil Nadu, they all should do it.
He said loan waiver is a temporary solution and there is a need for a series of measures to benefit farmers in long term. He also called for constituting an inter-ministerial committee to help farmers as various agriculture issues are currently looked into by different ministries.
He, however, rejected the demand that the central government should help states for this, saying loan waiver is state government's job.
Asked about the unfulfilled BJP's promise made before the 2014 Lok Sabha polls that it would offer farmers a return of 50 per cent on their agriculture cost, he said the existing mechanism to arrive at input cost has not been able to work it out.