The Hindu Business Line : Centre mulling further rate cut on farm loans

THE Centre is contemplating further cut in interest rates on agriculture loans from the present 9 per cent, the Union Minister for Agriculture, Mr Rajnath Singh, has said.

Though he did not specify the quantum of reduction, Mr Singh told newspersons here on Saturday that the "Prime Minister is seriously considering further cut and it would be announced shortly."

Stating that the present crop insurance scheme was not satisfactory, the Union Agriculture Minister said a new farm income insurance scheme was being formulated. Under the new scheme, the average production of seven consecutive years per acre per year would be taken into account. It would then be multiplied by the minimum support price (MSP), which would form the farm income per acre and will be insured by the insurance companies.

In computing farm income, the village would be taken as the basic unit and not the Mandal as in the present scheme, Mr Singh said. On a pilot basis the new insurance scheme was being implemented in 18 districts of the country, including Warangal in Andhra Pradesh.

The Agriculture Minister said the Government was expecting a record foodgrains production of 220 million tonnes this year. "We want to double the production to 440 million tonnes by the end of the Twelfth Plan (2011-12), for which an additional investment of Rs 1,42,000 crore would be required in the farm sector."

Mr Singh said the Government had raised the MSPs of all agri commodities, including sugarcane this year. It was considering a further raise in the import duty on palmolien to protect the domestic farmers.

The Minster said a special Jai Kisan channel would be launched later this month, using the infrastructure of the Doordarshan. After January 20, a call centre would also be set up in New Delhi to disseminate agriculture-related information. A 24-hour toll-free number would be available to farmers from across the country to get round-the-clock information. FM radio channels would also be utilised for better dissemination of information.

Referring to the drought in Andhra Pradesh, Mr Singh said the State Government had declared 315 mandals as drought-hit and sought assistance to the tune of Rs 850 crore and 15 lakh tonnes of rice. So far, Rs 171 crore and 3.8 lakh tonnes of rice have been released. On January 6, a high-level committee would meet in the national capital to provide more assistance to the State, he said.

Under the intensive cotton development programme, the Centre had granted Rs 3.85 crore to Andhra Pradesh, of which Rs 2.38 crore had been released.

The Union Minister later visited the research farm at Maruteru in West Godavari district.

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