Banks not to take coercive steps against farmers, assures SC

Financial institutions should not resort to coercive action for recovery of loans from farmers in case of crop failure and the government should intervene in such cases, the Supreme Court said Friday. The apex court said the government's approach should be preventive rather than compensatory and it should "travel the last mile" to reach out to the farmers.

The remarks were made by a bench of Justices Dipak Misra and A M Khanwilkar while dealing with a PIL filed by farmers from Tamil Nadu.

"Financial institutions should not resort to coercive action for recovery of loans from farmers in case of crop failure. Government should step-in if there is any coercion," the bench said.

The apex court said that government's job is to prevent farmer's suicides and not to distribute compensation.

It said that government's approach towards the agrarian crisis should be preventive, rather than compensatory.

The bench asked Additional Solicitor General P S Narasimha to devise a mechanism where farmers can go to the government seeking help, if financial institutions take coercive action against them for loan default due to crop failure.

It said the government should take the administrative action to get rid of the middlemen, who purchase produce from farmers at throwaway prices, and buy their crops at least on minimum support prices.

Narasimha said the present situation has undergone a sea change from earlier times, with the government bringing in Pradhan Mantri Fasal Bima Yojana by which farmers are compensated at a minimum premium.

He said under the insurance scheme now, the burden of premium was being shared by both the state and farmers.

To this, the bench retorted saying it does not want to know about insurance business, but common sense and prudence says that in the present case, it cannot be a premium-based business and such a stand should not drive the government's policies.