Why Are TN Farmers Facing Loan Restrictions Even After Government Increase?
Click to start listening
Synopsis
Farmers in Tamil Nadu are expressing their frustrations as cooperative societies reportedly offer them less than the newly increased loan limit of Rs 2 lakh. The situation raises concerns over access to financial resources during critical cultivation periods, compelling farmers to seek alternative, often riskier, funding options.
Key Takeaways
- Tamil Nadu's loan limit raised to Rs 2 lakh.
- Cooperative societies reportedly offering less.
- Farmers face challenges in accessing loans.
- Slow loan approval processes are detrimental.
- Urgent need for government intervention.
Chennai, Oct 14 (NationPress) Despite the Tamil Nadu government's decision to raise the limit for collateral-free crop loans from Rs 1.60 lakh to Rs 2 lakh effective January 1, 2025, numerous cooperative societies throughout the state are reportedly offering amounts below this new threshold to farmers.
Numerous cultivators have voiced concerns that only those who had taken loans in the previous year are being considered for new loans this season, while fresh applicants are being turned away.
The updated ceiling permits eligible farmers to access interest-free crop loans of up to Rs 2 lakh through Primary Agricultural Cooperative Banks (PACS), which must be repaid within a year. However, farmers' organizations have expressed worries that many societies in regions such as Tiruppur and Coimbatore are capping loans below the previous limit, compelling many to resort to private moneylenders charging higher interest rates.
While some cooperative banks are said to be adhering to the new limit, the application process remains inconsistent. In certain taluks, farmers have successfully obtained the full Rs 2 lakh loan amount without restrictions, while others face selective processing.
There are also reports of a sluggish loan approval process, with some societies taking more than 10 days to process applications that are ideally cleared within a week. Instead of handling each application individually, many banks are reportedly grouping them for collective processing, which delays fund disbursement during the crucial cultivation period.
Officials from the cooperative department have linked the variation in loan amounts to differing crop costs, stating that societies evaluate the proposed crops and determine the loan amount accordingly.
For crops with lower input costs, the approved amount may be less than Rs 2 lakh. Nonetheless, sources within the department assert that all eligible farmers are covered under the revised initiative.
Farmer organizations have called on the cooperative department to step in and provide explicit guidelines to guarantee that all eligible applicants receive the complete revised limit of Rs 2 lakh, irrespective of their borrowing history. They have also requested enhanced monitoring to ensure that the government's interest-free crop loan program effectively reaches every farmer without bureaucratic hurdles or regional imbalances.
Point of View
I must emphasize the critical need for transparency and consistency in the disbursement of crop loans. Farmers rely heavily on these funds, and any discrepancies can lead to dire consequences for their livelihoods. It is our responsibility to ensure that the government's initiatives reach every eligible farmer without unnecessary barriers.
NationPress
14/10/2025
Frequently Asked Questions
What is the new limit for collateral-free crop loans in Tamil Nadu?
The Tamil Nadu government has raised the limit for collateral-free crop loans from Rs 1.60 lakh to Rs 2 lakh effective January 1, 2025.
Why are some farmers receiving lower loan amounts?
Many cooperative societies are reportedly issuing loans below the new limit, leading to complaints from farmers who are being denied adequate funding.
What are the repayment terms for these loans?
Eligible farmers can avail themselves of interest-free crop loans up to Rs 2 lakh, which must be repaid within 12 months.
What have farmer organizations requested from the government?
Farmer groups have urged the cooperative department to ensure that all eligible applicants receive the full loan amount and to monitor the distribution process more closely.
How does the loan approval process impact farmers?
Delays in loan approvals and inconsistent processing can hinder farmers' access to necessary funds during critical planting seasons.
