Tamil Nadu government today proposed a series of measures to ease the burden on farmers following demonetisation, such as continuing sanctioning crop loans through primary agriculture credit cooperative societies and providing farm inputs like seeds.
An order of the state's Cooperation, Food and Consumer Protection Department said due to non-availability of adequate Rs 2000 and Rs 100 notes, "farmers are not able to take up agricultural operations and this has adversely impacted their livelihood."
Delay in providing crop loan would jeopardise their agricultural operations "particularly in the peak season" even as non-supply of inputs like seeds and fertilisers would lead to loss of crop. Loanee farmers could not draw cash from PACCS due to inadequate funds in such societies, it said, adding, "this is not the case" in commercial banks as farmers can draw upto Rs 25,000 cash per week.
The Registrar of Cooperative Societies has recommended to government that issue of crop loans and supply of inputs be facilitated at the earliest through PACCS to enable farmers take up timely operations for 'samba' season, it said.
Accordingly, the state government has now ordered a slew of measures, including sanctioning of crop loans through PACCS by following due procedure, it said.
To facilitate disbursal of cash, a new KYC compliant account will be opened in the name of loanee farmers at the District Central Cooperative Bank branch with which the PACCS is attached. Such an account will be opened without charging any fee from farmers and would enable them avail electronic transfers, cheques and DD on par with other customers of DCCB.
Once loan was sanctioned at PACCS, a debit note will be sent to the DCCB branch concerned for crediting the amount to the account. A farmer can withdraw cash upto Rs 25,000 per week or such other limit prescribed by RBI from the KYC compliant account, it said.
Inputs like seeds and fertilisers shall be supplied to farmers by PACCS without insisting on cash payment and it will be adjusted against their crop loan as and when sanctioned.
PACCS shall also make arrangements for making available farm equipment without insisting on payment in cash, and expenses shall be billed against crop loan of beneficiaries.
"Premium for crop loans will be debited from the account of loanee and remitted to the insurance company through DCCB branches well before timeline, ie December 15, 2016," it said.
These measures were 'temporary' in nature to tide over the "crisis of cash crunch" and shall be in force till further orders, it said, adding, DCCBs may resort to engaging retired employees on temporary basis to cope with the workload.
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