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New record likely in short-term farm credit

By T. Ramakrishnan

CHENNAI, DEC. 25. The cooperative sector in the State is poised to set a record in disbursement of short-term crop loans this financial year. Nearly Rs. 800 crores has been distributed against the target of about Rs. 1,040 crores. Cooperative banks may exceed the target by Rs. 100-200 crores. If that happens, the disbursement will be the highest in recent years.

This indication emerged from deliberations at a meeting here recently. Top officials of the Government, cooperative banks and commercial banks took part.

Last year, primary agricultural cooperative banks gave around Rs. 615 crores in short-term loans.In 2002-03, the disbursement was Rs. 965 crores and in 2001-02, it was 1,120 crores. The amounts distributed in 1999-2000 and 2000-01 were Rs. 880 crores and Rs. 1,050 crores.

Though the quantum given three years ago was the highest in recent years, experts in the cooperative credit system point out, the figure includes Rs. 370 crores given by the State Government in concessions. These included waiver of interest and penal interest. So, the actual credit flow will be more this year than in the previous years, they say.

The assessment of the new record in short-term credit is based on the fact that agricultural operations are carried out almost throughout the year, though the long-term samba crop is harvested around the middle of January. Besides, nature (availability of more water this time than in the recent past) and the renewed emphasis by the Central and State Governments on farm credit are cited as major contributing factors.

Transparent functioning

Of the 4,500 cooperative banks in the State, around 4,000 have given loans. Members of "weak banks" have been attached to the neighbouring bodies.

This time, the lists of eligible borrowers have been pasted on the noticeboards of offices of panchayats and primary agricultural cooperative banks. The "transparent" functioning has enabled more farmers to avail themselves of the loans, say the experts.

Normally, cooperative banks meet 10-12 per cent of the credit requirements of farmers, while commercial banks account for 80-85 per cent of farm loans and regional rural banks (RRBs) take care of the rest.

However, of the loans given so far, the share of the cooperative banks stands at 20 per cent. But in terms of absolute figures, commercial banks have till now given loans of Rs. 3,000 crores and the RRBs about Rs. 175 crores.

The cooperative banks' performance has to be seen in the context of their taking care essentially of the requirements of small and marginal farmers without security, note the experts.

Also, the State Government has fixed the rate at 9 per cent without linking it to repayment. It issued an order for giving crop loans against jewels at 9 per cent.

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