Banks to be asked to give farm loans: Govt
Aug 12 2014 , New Delhi
Responding to a query in the Lok Sabha on whether public sector banks are reluctant in extending loans to farmers, Singh replied in the affirmative.
It is a fact that some banks are reluctant to give loans to farmers, he said and added that pressure would be put on banks to give loans to them.
"...Agriculture sector has been identified by government as priority lending sector, which constitutes at least 18 per cent of the total loan portfolio of the banks.
"Crop loans are provided to farmers at a concessional rate of 7 per cent per annum with 3 per cent interest subvention for timely repayment," Singh said during Question Hour.
Post-harvest loans are also given to farmers on the basis of negotiable warehouse receipts for six months to prevent distress sale.
"Thus, crop loans are available to farmers at more favourable terms than loans available to industries sector. However, loans for post-harvest management activities like marketing and processing are available on rates decided by the banks concerned," the Minister said.
He also noted that suggestions have been received to accord status of industry to agriculture.
Noting that government has taken several measures for sustainable development of agriculture sector, Singh said schemes are implemented in a decentralised manner providing flexibility to states.
"The focus of government is primarily on expansion of farm income, creation of non-farm income opportunities, improvement in productivity of rainfed agriculture, increasing coverage of farming areas under protective irrigation and forging appropriate backward and forward linkages," he said.