Cold storage owners in struggle to repay Rs 100 crore loans

Cold storage owners in West Bengal on Wednesday said they were unable to repay Rs 100 crore loans as the potato market in some parts of the state had crashed due to demonetisation.

"We used to take loans from banks and refinance it to potato traders and farmers so that they can meet their payment obligation at the time of loading (potatoes to cold storage). Usually, farmers and traders repay the loan to us at the time when they release potato from cold storage.

"After, demonetisation, the potato market, which is mainly cash-driven, has been crashed. Many of the farmers and traders are not able to release their potatoes from the cold storages and repay the loans taken from us.

"Accordingly, we are unable to repay our debt taken from banks," West Bengal's Cold Storage Association's President Patit Paban De said.

Presently out of 575 cold storage units in the state 460 units are dedicated to storage of potato. "Loan outstanding is of about Rs 100 crore. Around 150-200 cold storages were facing challenges to repay their loans," he said.

According to State Level Banker's Committee's (SLBC) official, potato markets in some parts of the state due to demonetisation. "The committee sets up an expert group comprising of all the stakeholders to examine the truth. The group is slated to submit their report by early February. Accordingly SLBC will take a call," Manas Dhar, convener, SLBC, West Bengal, said.

The effort is aimed at proving relief to the cold storage owners so that they could get more time repay the existing outstanding loan and also get the fresh loan for the new session, he said.

According to the association, production of potato was more than 110 lakh tonnes in 2015 but the production in 2016 dropped to 90-95 lakh tonnes due to adverse climatic conditions.

This year there is a rise in cultivation to the tune of two-five per cent over that of the last year and due to favourable climatic condition till today production is expected to reach more than 115 lakh tonnes.

De said consumption within the state works out to 65 lakh tonnes including seeds and production beyond 65 lakh tonnes needed to be marketed in neighbouring states.