The Hindu Business Line : Banks and farmers

This refers to your editorial “Reaching the un-reached” (Business Line, November 7). It’s indeed shocking to note that though the actual disbursements of farm credit have been rising steadily in the country year after year, many farmers still remain untouched by the formal banking sector.

The reasons, of course, are not far to seek. Even after four decades of planning, we have not remedied some conspicuous defects in the matter of granting loans.

For instance, there are a lot of formalities (filling in the forms, guarantor’s signature, and so on) to get loans from the banking sector which discourage the farmers to approach such institutions for loans. This defect has not been removed at all.

Moreover, they (the farmers) must have adequate information on market conditions. After all, marketing is the most important stage of production, at it decides their economic status. The editorial aptly suggests that the entire banking system must endeavour to go beyond just lending. Being an agrarian economy, one feels, disheartened to see the problems like formal banking operations not benefiting many farmers, farmers’ ignorance of prices and other marketing conditions, uneconomic land holdings, grinding poverty, etc. in the rural sector.

S. Ramakrishnasayee, Ranipet