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No collateral required: Loan scheme ensures high prices for paddy

by Uditha Kumarasinghe

The Agriculture, Livestock and Samurdhi Ministry has implemented a special program to preserve the paddy harvest of farmers by introducing an advanced loan scheme to offer a high price to paddy cultivators.

Farmers who want to obtain this loan should be members of a farmer organisation and should organise themselves in small (five member) groups by obtaining membership of the Govijana Bank.

Under this program, farmers are entitled to receive loan benefits up to a maximum of 80 per cent of the value of harvest in the loft at 15 per cent interest. The maximum amount of loan granted under this scheme is Rs.90,000, a Ministry spokesman told the Daily News.

He said when paddy prices are increased, farmers can sell their paddy stocks and repay their loan and interest to the Govijana Bank.

Farmers who obtain loans under this paddy protection program should stock the paddy harvest at their own residences or in a store close to his residence. The keys should be handed over to the Agriculture Research Officer or to the Production Assistant Officer in that respective area, he said.

Nearly 450 such small groups are operating in the Polonnaruwa district. The farmers need not submit any collateral to obtain this loan. This entire program is based on the confidence and dedication displayed by the farmers, he said.

At present, this program is operating in six areas in the Polonnaruwa district including the Galamuna, Hingurakgoda, Pulasthigama, Giritale and Bakamuna areas.

The spokesman said this paddy protection program was launched as a pilot project in Galamuna and Giritale Govijana Sewa Centres during the previous 2000/2001 Maha season and 2001 Yala season. Initially, Rs. 5.6 million was granted to 112 farmers while the Govijana Bank could charge this money and interest from farmers within a few months. After paying their loans and interest, farmers could obtain Rs.1.2 million profit.

With the steady progress achieved by this program in Galamuna and Giritale areas, the Ministry has now expanded this program to Hingurakgoda, Pulasthigama and Bakamuna areas during this Maha season. Under this program, the Ministry has granted Rs.15 million to farmers in these areas.

He said the objective of the Ministry is to implement this program in each district which has a stock of paddy in the market. The Ministry in collaboration with District Secretariat will provide more financial grants to implement this program. In addition, 200 Samurdhi beneficiaries in Tamankaduwa Divisional Secretariat has also implemented a paddy protection program. The District Secretariat will grant Rs. 70 million for this.

As a result of this program, the farmers in the Galamuna area can now obtain Rs. 900 to Rs. 950 per 65 kg bag of Nadu and Rs. 950-1000 per bag of Samba paddy. Earlier the farmers were paid only Rs. 450 to Rs. 550 per bag of 65 kg Nadu paddy and Rs.650 to Rs. 700 per bag of Samba paddy, he added.

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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