Banks disbursed farm loans worth Rs 1,12,731 crore during the first three months of the 2011-12 financial year, according to the Agriculture Ministry.

For the entire 2011-12 fiscal, the Government wants farm credit to touch Rs 4,75,000 crore. “Achievement as of June 2011, is Rs 1,12,731 crore,” said a background note prepared by the Agriculture Ministry for the two-day Economic Editors’ Conference that started today.

Bulk of the farm loans were made by commercial banks, with disbursals totalling Rs 78,668 crore, while cooperative banks lent Rs 21,453 crore and rural regional banks Rs 12,610 crore, it said.

The Government has taken several measures for improving the flow of credit to the agriculture sector and has brought down the interest rate on loans to farmers who repay them on time from 7 per cent to 4 per cent per annum, it added.

Last year, banks had disbursed farm credit to the tune of Rs 4,46,779 crore against a target of Rs 3,75,000 crore. The flow of agriculture credit since 2003-04 has consistently exceeded targets.

The quantum of agricultural loans has gone up from Rs 86,981 crore in 2003-04 to Rs 4,75,000 crore in 2011-12. To help farmers, the Government has increased the limit for collateral-free farm loans from Rs 50,000 to Rs 1,00,000.

The Government is also implementing a package for the revival of cooperative banks providing short-term loans to the agriculture sector at a financial outlay of Rs 13,596 crore.

(This article was published on October 19, 2011)
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