From Our Special Correspondent
Daijiworld Media Network

Bangalore, Jan 10: Severe drought conditions in 99 out of the 176 taluks in Karnataka has forced the State Gvoernment to reschedule the crop loans borrowed by small and marginal farmers from cooperative societies and banks.

Cooperation Minister Laxam Savadi said crop loans in drought hit taluks would be rescheduled for a year and the one per cent rate of interest would be charged for the extended one year period.

The State Government has already declared 99 taluks as drought hit following inadequate rainfall in the last four weeks of the monsoon till the end of September.

Cooperative banks and societies in the State have disbursed Rs. 4080 crore loans at one per cent rate of interest to farmers as on November 30, 2011,

The Cooperative institutions had been given a target to disburse up to Rs. 7,000 crore in 2011-12.
Sugarcane growers would borrow loans in the next two months for planting, the Minister said.
The State Government has decided to reduce Value Added Tax on purchase and sale of cotton from five per cent to two per cent to help the growers.

Cotton traders and farmers have been demanding reduction in the VAT for the past several years. The Government used to charge five per cent tax to growers and traders and later reimburse three per cent, he said.

A meeting of cotton growers and traders held today decided to charge only two per cent tax on sale and purchase of the commodity, he said.

Referring to the onion glut in the market, the Minister said over 2.26 lakh quintals of onion has been procured from growers in northern districts of the State.

A sum of Rs. 24.20 crore had been spent for procurement of the commodity from 7524 farmers.
Savadi, however, defended hike in KMF milk prices and said increased input cost was the major reason for the hike. Moreover, the milk price was less in the State compared to other states even after the recent price hike.