The Hindu Business Line : SBI plans to double agri credit portfolio in Maharashtra, Goa

SBI Mumbai zone is on track to double its agriculture credit by March 2006. The bank hopes to achieve this by offering loans for hi-tech farming and for allied products such as commercial forestry, diary activities, and emu farming, and by entering into agreements for contract farming, according to Mr A. Ramesh Kumar, Chief General Manager.

The current outstanding in agriculture credit is Rs 823 crore and the bank hopes to double this by March 2006, he added. The Mumbai zone comprises 850 branches in Maharashtra and Goa.

According to Mr Kumar, crop diversification is proving to be a big success. In areas such as Buldana, farmers are now cultivating grapes, a non-traditional crop there. In areas such as Sangli and Nashik, farmers are also trying out high-value farming of crops such as pomegranate and custard apples.

Mr Kumar said that there was lot of movement to allied agriculture activities such as dairy. "Farmers want more loans for activities that go beyond one season. This is a healthy trend."

In case of agriculture income, the high level of non-performing assets was a problem and not the margins, which are always reasonable, Mr Kumar said.

Contract farming has taken care of NPAs, as there is lot of emphasis on risk mitigation. The bank currently has 73 agreements for contract farming and plans to tie up with more players.

SBI is looking to enter contract farming agreements in areas such as seed cultivation, organic cotton farming, tissue culture and greenhouse-related floriculture.

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