At a meeting organized by the Mysuru district administration to hear their grievances, farmers explained that the CIBIL score is a barrier to securing financial progress or assistance in taking up agricultural projects
At a meeting organized by the Mysuru district administration to hear their grievances, farmers explained that the CIBIL score is a barrier to securing financial progress or assistance in taking up agricultural projects
Farmers want agricultural loans to be decoupled from the CIBIL score as this is a barrier to securing a financial advance or assistance to start agricultural projects.
Credit Information Bureau (India) Ltd. The score generated contains details of an individual’s track record of credit history and repayment alongside default and is shared by financial institutions and credit agencies before a loan is approved.
The call for decoupling the CIBIL score from farm credits came at a meeting convened by the Mysuru county government to resolve farmers’ grievances in Mysuru on May 6.
Kurubur Shanthakumar, president of the Karnataka State Sugarcane Cultivators’ Association, said farmers are caught in a never-ending cycle of crop losses due to flooding or drought, affecting timely repayment. This is reflected in the CIBIL score and blocks a farmer’s access to institutional credit. He proposed a policy change to separate the CIBIL score from farm credits.
Deputy Commissioner Bagadi Gautham pledged to write to the Lead Bank and others concerned to draw their attention to the farmers’ demand and also submit a report to the Karnataka government.
Some of the farmers drew attention to the sugar cane harvest cycle, which is 18 months from planting to harvest, while the lending cycle is 12 months. This put pressure on farmers to repay the loan and interest before they receive their royalties from the sugar mills. They want to change the credit cycle from 12 months to 18 months.
Although Prime Minister Narendra Modi has stated that all farmers should receive the money for their products within 14 days of procurement, the reality is different. Farmers claim that the delay in crediting the amount owed to farmers adds to their interest burden.
When a Mysuru Taluk farmer raised the issue of crop losses due to unusual rainfall and how the amount released did not cover the actual loss, the deputy commissioner reiterated the importance of securing insurance coverage and opting for crop insurance as a safety net.
Authorities’ attention was drawn to alleged anomalies in the existing system, which are negatively impacting farmers’ incomes. Farmers claimed that there was a tendency to cluster high-yielding sugar cane varieties with lower-yielding ones to reduce overall sugar recovery, resulting in losses for farmers.
Since sugar recovery is the basis for setting the rate per tonne of sugar cane, Hathalli Devaraj and other farmers indicated they were calling for a review of the alleged wrongdoing.
Regarding the RBI’s policy of timely repayment of loans and interest subsidies that help ease the interest burden on farmers, officials were told that certain banks are not following the norms and are denying the benefit to farmers.
The DC directed Lead Bank officials to investigate the allegation and take appropriate action.
Over 200 farmers from Mysuru and surrounding regions attended the meeting along with BR Poornima, CEO of Mysuru ZP, R. Chetan, Superintendent of Police, and Mahanteshappa, Joint Director of Agriculture.
