THIRUVANANTHAPURAM: The cooperative sector fell far short of its expectations in 2006-07 in helping the State Government carry out its policy decision to provide low-interest loans to the farmers.

This is the conclusion to be drawn from the data provided by National Bank for Agriculture and Rural Development (NABARD) General Manager B.S. Shekhawat, at a press conference here on Tuesday.

Without meaning to underrate the Government's efforts to strengthen the cooperative sector, Mr. Shekhawat said the NABARD was optimistic that the situation would change this year.

The Left Democratic Front (LDF) Government, upon assuming power in May 2006, had announced a series of measures to address the problem of indebtedness among the farmers of the State. One of these was to provide farm loans at 5.5 per cent to the farmers through cooperative societies to set an example for the banks.

According to Mr. Shekhawat, the cooperative sector had given NABARD the projection that it would disburse Rs.1,660-crore as low-interest loans to the farmers in 2006-07. NABARD had promised the sector support to the tune of Rs.650 crore at an interest of 2.5 per cent (allowing sufficient cushion to the cooperatives to give farm loans at 5.5 per cent interest).

Mr. Shekhawat said the sector, however, could draw only a sum of Rs.125 crore out of a total amount of Rs.342 crore sanctioned by Nabard as first instalment of its assistance.

NABARD received applications for the release of Rs.84 crore towards the end of the financial year. There was no requisition at all for the second instalment.

This means that the sector would be able to use only Rs.209 crore out of the total sum of Rs.650 crore promised by NABARD.

Mr. Shekhawat said, according to tentative figures with NABARD, the total farm loans disbursed by cooperative sector during 2006-07 came to only 602 crore, though the target was Rs.1,660 crore.

He said many farmers who had constantly depended upon the cooperative societies seemed to have migrated to commercial banks during the year, despite the low interest on offer at cooperative societies.

He said NABARD had offered to support about 40 per cent of the low-interest farm loan drive of the cooperative sector.

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