Chief Secretary N. Narayanan (centre) with Prakash Bakshi, Chief General Manager, NABARD (right), and F.R. Joseph, Regional Director, Reserve Bank of India, at a seminar in Chennai on Tuesday. — Photo: R. Ragu

CHENNAI: A rational insurance mechanism for farmers, which will stand by them at the time of distress, should be designed.

This is one of the suggestions received by the National Bank for Agriculture and Rural Development from 3,000 farmers of Tamil Nadu. This has been included in the State Focus Paper: 2006-2007, which was released at the State-level credit seminar organised by the NABARD on Tuesday.

Expressing their opinion that the present crop insurance cover was not "farmer-friendly," the agriculturists said the compensation they received was "inadequate" and this too, after a very long time. In case of continuous drought, insurance claims were not attractive from the third year because the average yield data of the previous three years were taken to assess the loss.

Cover for all crops

Unduly long time was taken to settle the insurance claim and the farmers were required to bear the interest burden till the settlement was made.

This made insurance unattractive and burdensome, the farmers said, adding that all crops grown in districts should be covered.

With regard to credit delivery, the agriculturists said banks took a very long time to sanction loans and the procedures for the loans were still cumbersome.

As the loan amount sanctioned was inadequate, farmers, in many cases, resorted to borrowing from moneylenders at very high rates of interest.

Though many farmers were aware of the flexibility for withdrawal and repayment of loans under the Kisan Credit Card, they were yet to utilise the facility. They were unaware of the personal accident insurance cover available under the KCC.

Loan applications and all forms in commercial banks were in English and they should be made available in local language too.

If a farmer was unable to repay a loan in time, he or she should not at once be declared as a defaulter. Three years' record should be taken into account.

Many farmers said that quality seeds were not available at the time of sowing.

Further, the quantum of seeds produced by the Government was inadequate. In many places, government veterinary centres lacked qualified personnel.

Inaugurating the seminar, N. Narayanan, Chief Secretary, emphasised the importance of developing micro watershed programmes in the State, as the focus would be on creation of new irrigation.

He wanted credit institutions to provide support in this endeavour and said 1000 micro watershed schemes had been proposed this year.

He suggested that the institutions extend assistance to schemes of self-help groups in providing value addition to their products and services. Credit flow to rural non-farm sector could be improved through SHGs.

F.R. Joseph, regional director of the Reserve Bank of India, said that from the coming financial year, the potential linked credit plans (PLPs) would form the basis of the annual credit plan.

Prakash Bakshi, chief general manager of the NABARD, said the NABARD had circulated PLPs to all the stakeholders concerned.

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