The Hindu : Karnataka News : Banks may be urged to give soft loans to farmers

Online edition of India's National Newspaper
Friday, Jul 02, 2004

Karnataka

Karnataka

Banks may be urged to give soft loans to farmers

By Our Special Correspondent

BANGALORE, JULY 1. The Chief Minister, N. Dharam Singh, will address a special State-level bankers' meeting next week where he will seek the cooperation of commercial banks on extending easy loans to farmers. This will be among the efforts of the State Government to free farmers from the clutches of private moneylenders.

The Additional Chief Secretary and Development Commissioner, Vijay Gore, told presspersons here today that while the bankers were being requested by officials to participate in a big way in funding the farmers for their agricultural operations, the Chief Minister would address the meeting of senior bank executives to drive home the point that availability of loans at reasonable rates of interest would in itself give adequate courage to farmers.

The economic status of farmers has been bad because of three years of continuous drought.

He said the State Budget, which would be presented on July 19, was expected to provide greater focus on farmers.

"I have impressed on the Deputy Chief Minister, Siddaramaiah, who holds the Finance portfolio, to double the allocation to the agriculture sector, including horticulture and drip irrigation. While 27 per cent of the funds earmarked in the Budget is generally made over to the irrigation sector, people generally believe that it was also to the benefit of the farm sector although in reality it was not true." Further, even after the completion of all irrigation projects and the network of canals, only 22 per cent of the land area would be covered by irrigation and the remaining would continue to be dry lands.

The bankers would be requested to achieve the targets in extending the Kisan Credit Cards to all land-holders. While the target was around 25 lakh credit cards, cooperative banks in the State had almost achieved their targets while the commercial banks had to cover a lot of ground. The bankers would also be requested to extend consumer loans to the credit card holders repayable over a longer period of time. This would enable the farmers to purchase certain basic consumer goods at a reasonable rate of interest, Mr. Gore said.

The farmers would also be motivated to repay their dues to the banks on time and thus ensure that they were not listed as defaulters. Commercial banks were wary of farmers owing to the delayed payments and the erratic monsoon and droughts. While the State Government was promoting crop insurance in a big way, farmers turned confident following good rainfall and even kept away from crop insurance. It was only when they were hard hit did the farmers realise the value of crop insurance, he said. On whether the State was still gripped by drought and whether the Government had sought more foodgrains from the Centre, Mr. Gore said the State had a stock of two lakh tonnes of foodgrains and this would suffice for now.

He said barring a few pockets, rainfall was widespread across the State and most regions received normal rainfall. While some areas received excess rainfall, it was poor in Gulbarga and Bidar districts; there was no rain in the two districts for the past 21 days. This had restricted sowing to a lesser area.

Mr. Gore said while sowing was taken up in 24.74 lakh hectares in a normal year, this year it was in 29.99 lakh hectares. During the same period last year, sowing was restricted to 5.93 lakh hectares owing to failure of rains. Belgaum topped the list in sowing this year with a coverage of 5.44 lakh hectares compared to 3.49 lakh hectares in a normal year.

Interestingly, the area under soyabean had suddenly gone up, apparently owing to the good market conditions. Last year, the area under soyabean was only 45,000 hectares while this year it was estimated be over 1.40 lakh hectares, he said.

Diversification of crops would go a long way in farmers commanding a good price for their produce and the State Government had directed the Agriculture Marketing Board to keep a close watch on market conditions.

Mr. Gore said the district officials and farmers were being encouraged to plant "honge" saplings along bunds and barren areas as the trees earn good revenue. Honge seeds were used in producing bio-fuel. The Bangalore Metropolitan Transport Corporation had recently run two of its buses using the bio-fuel but the operations had to be suspended owing to the poor availability of honge oil, he added.

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