The New Indian Express – Farm loans: Soon, licence must for money lenders in Punjab

Harpreet Bajwa

The cabinet also approved another bill to create a Price Stabilization Fund to ensure that farmers in the state get the Minimum Support Price (MSP) for their produce.

Chandigarh – Panjab – India, 24 August 2018. The Punjab Government has decided to streamline the system of money lending to farmers by fixing a limit on the advance on per acre of land, with the rate of interest also to be duly determined by the government.

The cabinet also approved another bill to create a Price Stabilization Fund to ensure that farmers in the state get the Minimum Support Price (MSP) for their produce.

The state cabinet today approved the introduction of Punjab Settlement of Agricultural Indebtedness Bill, 2018, in the Vidhan Sabha session beginning tomorrow.

The Bill, aimed at further relieving the state’s farmers from the vice of debts, proposes a series of measures to protect the interests of the farming community, saving them from the clutches of unauthorized money lenders who charge exorbitant rates to give unlimited amounts as loans.

With the enactment of the Bill, only licensed money lenders will be allowed to advance the money, with lending by others deemed to be illegal.

Only these licensed money lenders will be allowed to move the debt settlement forums, which will be headed by Commissioners. The lender would be required to submit proof of the amount lent to the farmer.

It has also been decided to bring down the total number of debt settlement forums from 22, as per the existing Act passed in 2016, to five. The new forums would be constituted at the divisional levels. This would help in ensuring a more systematic approach to handling farm debt cases.

The decision to amend the existing law on farm loans has been taken to curb the growing trend of agricultural indebtedness, resulting in the mismatch between the prices of agricultural inputs and minimum support price of agricultural produce. The farmers raise loans from both institutional and non-institutional resources.

However, while the institutional loans are regulated through various special legislations governing the institutions providing such loans, non-institutional loans are largely unregulated having no mechanism for redressal of grievances of debtor.

In the light of this, the Government has thus enacted the Punjab Settlement of Agricultural Indebtedness Act, 2016 which provide a framework for regulation and settlement of agricultural debts.

The cabinet also approved a Bill to create a Price Stabilization Fund to ensure that farmers in the state get the Minimum Support Price (MSP) for their produce. The Bill will be tabled for enactment in the Vidhan Sabha session, beginning tomorrow, it was decided by the Cabinet.

The Bill is aimed at protecting the interests of farmers in the event of a sudden fall in prices of certain agricultural commodities below normal prices. It will bring about amendments to section 25 (A), 26 and 28 of the Punjab Agricultural Produce Markets Act, 1961.

As per the amendments, the contribution will be charged out of the commission charged by arhtiyas towards Agricultural Produce Price Stabilization Fee.

The Market Development Fund and Market Committee Fund are being amended by inserting new clause (xxii) after section 26 & 28 of the Punjab Agricultural Produce Markets Act, 1961, so that these funds can also be used in the Price Stabilization Fund.

The step has been taken in view of the pitiable condition of the state’s farmers, pushing many of them to suicide in the recent past. The state government has already taken several other path-breaking initiatives for the welfare of the beleaguered farmers, including waiver of debts of small and marginal farmers.

http://www.newindianexpress.com/nation/2018/aug/23/farm-loans-soon-licence-must-for-money-lenders-in-punjab-1861785.html

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