The Hindu Business Line : `Include branded pumpsets in farm loan package'

THE pump industry in Coimbatore region, which accounts for nearly 50 per cent market share for branded pumps catering to the agricultural sector, has sought inclusion of farm pumpsets in the credit package announced by the Union Finance Minister, Mr P. Chidambaram.

The package seeks infusion of about Rs 1.05 lakh crore during the current fiscal as institutional credit to the agricultural sector.

The industry feels that since non-availability of finance at reasonable interest has been a major factor influencing the decision of small and marginal farmers to opt for energy-guzzling kit pumps, by extending finance for purchase of branded pumps, the farmers could be helped in buying quality pumpsets.

The organised sector has also expressed its readiness to discuss with the bankers and the State Governments the question of price for bulk purchase of agricultural pumpsets meeting the requirements of small and marginal farmers.

Speaking to Business Line, Mr G. Rajendran, President, Southern India Engineering Manufacturers' Association (SIEMA), Coimbatore, said the latest initiative taken by the Finance Minister to reach out to the farmers would greatly benefit the small and marginal farmers who have been hit by successive drought, falling price of agricultural produce, high cost of borrowing etc.

Earlier, Nabard used to finance purchase of agricultural pumpsets but in recent times, this was this facility was not extended to farmers.

While big farmers were able to purchase pumpsets of higher capacity, small and marginal farmers having less than five acres of land generally opted for pumpsets in the 5 HP-7.5 HP range. Since finance was hard to come by, they went for kit pumps that were cheaper by about 40 per cent compared to the branded pumpsets.

Mr Rajendran said the advantage of branded pumpsets was that they were 20 per cent more energy-efficient compared to the assembled pumps and could pump out 10 per cent to 20 per cent more water, which helped to irrigate a larger area, while being run for the same duration like the assembled pumpsets.

While a 5 HP branded pumpset costs around Rs 40,000, a 7.5 HP pumpset is priced around Rs 51,000.

The SIEMA President wanted the purchase of pumpsets be covered under the farm credit package since difficulty in securing finance at reasonable interest rate was the reason for small and marginal farmers opting for kit pumps, he expected that once this need was met, the farmers would shift to energy efficient pumps manufactured by the organised sector.

More Stories on : Farm credit | Engineering | Tamil Nadu

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