Kerala Government proposes to constitute a Debt Relief Commission

Thiruvananthapuram, June 23: The Kerala Government proposes to constitute a Debt Relief Commission and an Agriculture Commission with a total outlay of Rs 156 crore to provide relief to debt-trapped farmers and to ensure stable prices for agriculture produce.

Presenting the revised budget for 2006-2007 in the State Assembly today, Finance Minister T M Thomas Isaac said the Debt relief Commission would have powers to declare any area or crop as disaster-hit and give directions to the government and financial institutions on matters concerned with farm loans.

The Debt Relief Commission, on the basis of detailed studies, could make recommendations for one-time settlement and rescheduling of loans, cutting of interest rates and reduction in the repayment of principal amount under special circumstances.

He said a legislation would be enacted to empower the Commission for one-time settlement of loans taken by farmers from private moneylenders on higher interests.

Dr Isaac claimed that Kerala would be the first State in the country to have such a body to provide relief to debt-ridden farmers.

He said the proposed Agriculture Commission would make recommendations for ensuring stable prices for agriculture produce and for raising investments in the farm sector.

It could also make recommendations for fixing floor price for agriculture produce, procurement and introduction of crop insurance.

It would also prepare a project for constituting a price stabilisation fund by coordinating with the Central Government's price stabilisation fund.

To provide relief to coconut growers hit by the fall in prices of coconut, he announced a one-year tax exemption for coconut and expected that the loss on this count could be met by Central assistance.

Dr Isaac said paddy cultivation would be raised by adopting better water management, distribution of high-yielding varieties of seeds and techniques developed by the agriculture university. Steps would also be taken for promoting cultivation of spice and medicinal paddy. A total outlay of Rs 53 crore had been made under various schemes for promotion of paddy cultivation.

He said a new package would be implemented for the revival of cash crops like tea, coffee and pepper with Central assistance.

Replantation, raising of productivity and stability in prices were the measures proposed under the package.

Dr Isaac said in addition to seeking Central assistance to provide debt relief to farmers of Wayanad, Kerala had also submitted a Rs 501 crore package to the Planning Commission for the revival of the farm sector in the district. The Centre had also been requested to provide asistance for implementation of similar packages for Idukki, Palakkad and Kasaragod districts.

He said the NABARD would be requested to sanction Rs 100 crore more in addition to Rs 253 crore it had allotted for agriculture and rural development for 2006-2007. Underutilisation of funds sanctioned by the NABARD during the last seven years had come in the way of getting more loans from that institution. Out of a total of Rs 1,365 crore allotted by NABARD, only Rs 625 crore could be spent during the last seven years, he said.

UNI