"If one needs money we will offer loans, banks will help. But seeking loan waiver has become a fashion these days," said Mr Naidu.
"But waiving off loans is not the final solution and it should be considered in extreme situations," he added.
Mr Naidu said farmers need to get a good remunerative price for their produce and care should also be taken of those in distress.
"Most importantly we should create adequate infrastructure and facilities like godowns, cold storage, refrigerator vans, among others. Also, we will have to ensure that affordable credit is available to these farmers," the minister said at an event in Mumbai.
The Shiv Sena, which partners the BJP in Chief Minister Devendra Fadnavis' government in Maharashtra, has called the union minister's statement "shameful and unfortunate." Scathing criticism also came his way from opposition leaders like the Left's Sitaram Yechury and Delhi Chief Minister Arvind Kejriwal of the Aam Aadmi Party.
"Tomorrow, he will say farmer suicides are fashionable," said Mr Yechury, accusing the ruling BJP at the centre of not keeping its election promise to farmers on a minimum support price for their crops that would be one and a half times more than the production cost.
"When you waive loans of the rich then you don't find it to be a 'fashion'. But the same becomes a fashion when you do it for the poor?" said Arvind Kejriwal.
Late on Thursday evening, Mr Naidu clarified that he was referring to the "fashion of political parties" competing with each other to ask for debt relief.
The BJP governments in Uttar Pradesh and Madhya Pradesh and Congress governments in Punjab and Karnataka have recently announced farm loan waivers. Farmers in Maharashtra, Haryana, Rajasthan and Odisha have staged protests, demanding loan waivers.