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8.
Crop Insurance
(i) If the NAIS procedures are simplified, the crop insurance can be
used as a safety net for farmers in case of natural calamities and losses
of crops. (ii) Wherever state governments adopt them, weather-based
crop insurance scheme with cyclical credit can go long way in providing
relief to the distressed farmers. Crop insurance continues to be “Crop
loan insurance”.
9.
KCC and Term Loans
As regards term loans being included in the KCC, it is seen that banks
have still not implemented this aspect fully. There is a need for offering
composite loan products including crop loan and investment loans
(Vyas Committee and the R V Gupta Committee). This can be done
in two ways (a) A five year composite loan (crop loan and term loan)
may be sanctioned to the farmer with annual reduction in the limit on
account of term loan portion with a stipulation that interest should be
repaid annually or (b) the crop loan can be sanctioned with a condition
that the account should show some credit each year and that in the year
of good crop, the credit should be at least 50% of the loan sanctioned.
