Need To Ensure Credit Flow To Small Farmers, Says Joint Secretary Agriculture
The government has achieved the agriculture credit disbursal target of Rs 10 lakh crore for the last financial year and has enhanced the target for current fiscal to Rs 11 lakh crore.
Although the credit disbursal for agriculture sector in increasing every year, there is a need to increase the flow to small farmers and provide credit access to tenant cultivators.
To address the issue, the agriculture ministry will bring a proposal before the Cabinet for increasing credit outflow to small farmers based on the recommendation of the Sarangi Committee, reports Business Line.
The Sarangi Committee was constituted in 2009 to investigate credit related issues of farmers after numerous small and marginal farmers, especially tenant farmers, oral lessees, and sharecroppers, were found to have continued difficulty in accessing credit from formal sources despite sharp rise in agriculture credit disbursal over the past few years.
Ashish Kumar Bhutani, joint secretary in Ministry of Agriculture, while addressing a national conference organized by FICCI, said that the challenge doesn’t lie in disbursing the credit, but in disbursing it to right farmers.
Bhutani said Rs 6.8 lakh crore was short-term crop loans out of Rs 10 lakh crore credit disbursed last fiscal. In the short-term crop loans, he said 50 per cent amount was provided to small and marginal farmers. He said the ministry has sought data from banks for better targeting of agriculture credit.
Addressing the conference, R Amalorpavanathan, Deputy Managing Director, National Bank for Agriculture and Rural Development (NABARD) said, “There is a need for integrated financing system for the farmers. Ultimately, credit is a function of trust and distress emanates from the squeezing of the profits of the farmers.”
Dr. BB Pattanaik, Chairman, Warehousing Development and Regulatory Authority (WDRA), Government of India, said that warehousing can be a game-changer in improving profits of the farmers. “Huge private sector participation has helped in creating high-end, mechanised storage system for the agriculture sector”, he said.
He also informed that WDRA has a seamless online process for registering a warehouse, “Only those warehouses that plan to issue negotiable warehouse receipts, have to register with WDRA. But for proper remuneration to farmers, there has to be as many registered warehouses as possible”.
Increasing scope
In his budget speech for 2018–19, Finance Minister Arun Jaitley had said that NITI Aayog, in consultation with state governments, would evolve a suitable mechanism to enable access of lessee cultivators to credit without compromising the rights of the land owners.
“Presently, lessee cultivators are not able to avail crop loans. Consequently, a significant proportion of arable land remains fallow and tenant cultivators are forced to secure credit from usurious money lenders,” he had said.
