A “centre leader” counts money to be distributed as a micro-loan at a meeting organized by a microfinance institution in Sadasivpet, India. (Photographer: Adeel Halim/Bloomberg)

Government Meets Rs 10 Lakh Crore Credit Disbursal Target For FY18

Agriculture credit is growing every year and reached Rs 10 lakh crore last fiscal, the government said today while stressing on the need to increase the flow to small farmers as well as providing loan access to tenant cultivators.

The agriculture ministry will soon put a proposal before the Cabinet to improve lending to small and marginal farmers based on the recommendations of the Sarangi Committee.

“Agriculture credit flow is going up every year. We have achieved the disbursal target of Rs 10 lakh crore in 2017-18 fiscal. The target for the current financial year has been enhanced to Rs 11 lakh crore,” said Ashish Kumar Bhutani, joint secretary in the Ministry of Agriculture.

Speaking on the sidelines of a conference, organised by industry body Ficci, he said that disbursing agriculture credit is not a challenge. The challenge lies in giving credit to the right farmers, he added. “Out of the Rs 10 lakh crore credit disbursed in the last fiscal, Rs 6.8 lakh crore was on account of short-term crop loans. Nearly half of that amount was provided to small and marginal farmers.”

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The ministry has sought data from banks for better targeting of agriculture credit. Government think-tank NITI Aayog is working to find a suitable mechanism for providing credit access to lessee cultivators, said Bhutani.

In his Union 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 the access of lessee cultivators to credit without compromising the rights of landowners.

“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,” Jaitley had said.

Addressing the conference, Warehousing Development and Regulatory Authority Chairman BB Pattanaik announced that negotiable warehousing receipts would be issued electronically, helping farmers to get easy bank finance against their stocks.

NABARD Deputy Managing Director R Amalorpavanathan spoke about the need for integrated financing to farmers. He also pointed out that farmers are in distress because their margins have been squeezed by rising input costs and low realisation.

Also read: Union Budget 2018: Government To Raise Support Price For Kharif Crops