The Hindu Business Line : 'Investment credit schemes vital for farm growth'

ONE of the first policy initiatives of the UPA Government was to ensure adequate credit to farmers. This has given a boost to fund flows to the agriculture sector over the past year. Nabard is an apex organisation monitoring the flow of funds to the farm sector. Ms Ranjana Kumar, Chairperson, Nabard, believes that providing financial support alone is not enough to ensure the desired growth in the sector.

She spoke to Business Line on issues related to farm credit and Nabard's initiatives in this direction.

On credit flows:

Growth in agriculture depends on various factors. Credit is only one among them. There are other things such as extension services, which are necessary for agriculture, like the timely supply of quality seeds, insecticides and the right type of fertilisers.

These are the responsibility of State governments. Banks only provide credit. There is a need for integration of all participants in the sector.

We have to understand that farmers are not generally educated. There is not much information coming to them.

So they, to a very large extent, are depending upon some traditional methods in farming as well as marketing their produce.

They need to know things like how they can plan their crop and produce better, what can they grow in between two crops etc.

For the last two decades, agriculture credit has grown only by 14-15 per cent. This year we are looking at an increase of at least Rs 3,000 crore over last year. But the question is how to sustain this growth. A lot has to be done on capital formation at the ground level. Therefore, investment credit schemes become important. Last year, Nabard was asked to monitor credit flow. We set up a core committee with five large banks.

The idea was to find a solution to bottlenecks. Between November last year and January this year, we have come out with 142 investment credit schemes.

On State Level Bankers Committee (SLBC):

One of things that Nabard is advocating is a forum like the SLBC. Either the Chief Minister or the Finance Minister often attends SLBC meetings. It has got all the departments of the government; the fisheries, animal husbandry, the handloom sector, the training dept, the crop finance, the agriculture sector, etc.

But somehow it is felt that going through these meetings is becoming more of a drill.

So this forum should really take place with a lot of care and discuss everything sector-wise with the kind of seriousness that is needed. You gain by the wisdom and experience of all those are present to see how best we can co-ordinate.

The real problem is the lack of co-ordination. Accountability has to be established on a forum like SLBC, so that there is total clarity.

On Nabard's initiatives and Farmers Club:

Nabard is thinking of working closely with corporates to help provide information to farmers clubs.

For example, we have 9,000 farmers clubs in the country. Farmers clubs are supposed to be forums where farmers can get access to information on things such as bank loan schemes, usage and maintenance of tractors, fertilisers, seeds, etc. We had called a meeting of corporates in January to seek their support for the farmers clubs.

These corporates represented manufacturers of tractors and other farm implements, and fertiliser and pesticides. Corporates can help a lot with the expertise that they have.

We are also telling banks to form at least 250-300 farmers clubs each. If this happens we can think about 5,000 farmers clubs by the next year itself.

Knowledge centres:

Nabard is also promoting knowledge centres. The cost of setting up a knowledge centre is to the tune of around Rs 1 lakh per centre. Some of them are doing a good job.

Nabard will soon meet at least 10 States, including Andhra Pradesh, Karnataka, Tamil Nadu, Gujarat, Uttranchal, Madhya Pradesh, Rajasthan, and Orissa.

The idea is that each State Government should agree to invest around Rs 10 crore in developing knowledge centres. We are looking at 10,000 such centres in ten States in a year.

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'Investment credit schemes vital for farm growth'