The Tamil Nadu government has announced an additional waiver of cooperative crop loans, raising the relief available to eligible farmers and taking the total crop loan waiver to around ₹6,220 crore.
The announcement was made by Chief Minister C. Joseph Vijay in the Tamil Nadu Legislative Assembly on August 17, 2026, under Rule 110, with the government citing the need to protect farmers despite the state’s financial constraints.
Under the latest decision, crop loans of up to ₹75,000 will be fully waived. For loans between ₹75,000 and ₹1 lakh, the waiver will be capped at ₹75,000, while farmers with crop loans above ₹1 lakh will be eligible for a waiver of up to ₹35,000.
13.34 lakh farmers to benefit
The additional waiver is expected to benefit 2,38,264 farmers who have crop loans between ₹75,000 and ₹1 lakh. These farmers could receive an additional waiver of up to ₹40,000 over and above the relief already provided.
The government estimates that the latest measure will impose an additional financial burden of around ₹953.06 crore on the state.
Including the earlier waiver, the government said around 13.34 lakh farmers will receive crop loan relief, with the total waiver amount reaching approximately ₹6,220 crore.
Earlier waiver raised to ₹75,000
The latest announcement follows the government’s decision in June to expand its initial crop loan waiver.
On May 25, 2026, the government had ordered a full waiver of crop loans up to ₹50,000 availed by small and other farmers through cooperative banks. Following representations from farmer organisations across the state, the waiver was subsequently increased to cover loans up to ₹75,000 in full, while loans above that threshold received partial relief.
An order issued on June 19 provided for a total cooperative crop loan waiver of ₹5,932.23 crore covering 14.44 lakh farmers. By July 31, ₹5,267 crore had been released, with the amount credited to the accounts of 13.34 lakh farmers, according to the government.
Fiscal constraints limit repayment window
The government said its decision has been taken against a backdrop of tighter fiscal constraints and changes in the repayment framework for loan-waiver schemes.
It noted that in earlier instances, amounts due to cooperative banks following crop-loan waivers had been paid by the government over periods of four to five years. For the 2021 crop-loan waiver, the government said payments were made to cooperative banks in 12 instalments between 2021 and 2026.
However, the government pointed to an RBI communication dated November 28, 2025, under which the full amount related to a government loan-waiver scheme is required to be paid to cooperative banks within 45 to 60 days, in accordance with the applicable operating procedures.
Balancing farmer relief and fiscal pressure
The additional waiver follows consultations with representatives of farmer organisations, senior ministers and department secretaries on August 7, 2026.
The government said it considered the demands for a larger waiver while also taking into account the state’s financial position and available resources. Despite the additional ₹953.06 crore burden, it decided to extend further relief to farmers.
The move effectively broadens the state’s crop-loan relief programme while placing an additional financial commitment on the government at a time when its ability to defer payments to cooperative banks has become more constrained.