Nearly Rs90,000cr credit disbursed to farmers in Q1

Nearly Rs90,000cr credit disbursed to farmers in Q1

New Delhi:Banks have disbursed nearly Rs90,000 crore credit to farmers in the April-June quarter of this fiscal, the government said on Monday.

The government has fixed the credit flow target during 2010-11 fiscal at Rs3,75,000 crore.

“Agriculture credit of Rs89,687 crore has been disbursed to farmers across the country till June 2010 in the financial year 2010-11," an official statement said.

The credit disbursement in 2009-10 was Rs3,66,919 crore against the target of Rs3,25,000 crore.

“The flow of agriculture credit since 2003-04 has consistently exceeded the target. Agriculture credit flow has gone up from Rs86,981 crore in 2003-04 to Rs3,66,919 crore in 2009-10," the statement added.

As part of farmer-friendly policy, the government has taken several measures for improving agricultural credit flow and bringing down the rate of interest on farm loans.

Banks provide farm loan at an interest rate of 7%. However, those farmer who are making timely payment are getting crop loan at 5% interest rate from the current fiscal.

From kharif 2006-07, farmers are receiving crop loans up to a principal amount of Rs3 lakh at 7% rate of interest.

In 2009-10, an additional one percent interest subvention was provided to those farmers who repaid their short-term crop loans as per schedule.

The subvention rate for timely repayment of crop loans has been raised from 1% to 2% from the current fiscal, thus bringing down the effective rate of interest for such farmers to 5% per annum.

The limit of collateral free farm loan has also been increased from Rs50,000 to one lakh Rupees.

Meanwhile, the government said it has issued Kisan Credit Card (KCC) to 9.48 crore eligible and willing farmers upto June, 2010.

Launched by NABARD in consultation with other banks in 1998, KCC helps farmer for purchase of inputs etc during the cropping season.