Agri Business

Budget likely to lower farm loan interest rate

PTI New Delhi | Updated on February 27, 2011

Focus on farming: The Budget is likely to provide sops to the farm sector including reduction in interest rate for timely re—payments and boosting investments in agri-infrastructure. (A file photo)   -  Business Line

With high inflation, especially food prices much beyond comfortable levels, the Budget is likely to provide sops to the farm sector including reduction in interest rate to 4 per cent for timely re—payments and boosting investments in agri—infrastructure. At present, farmers get credit at a rate of 7 per cent.

However, those who clear dues on time get an incentive of two per cent —— paying back at the rate of 5 per cent.

However, PM’s Working Group on Agriculture, headed by Haryana Chief Minister Bhupinder Singh Hooda, has proposed that all farm loans should be given at 4 per cent.

Meanwhile, Agriculture Ministry in its Budget wish—-ist has recommended farm loans at 4 per cent for prompt payers. It has also sought more funds for creating agri-infrastructure and enhancing output of millets, vegetables and palm cultivation.

Noted farm scientist M S Swaminathan expects the Budget to announce various steps to boost investments in the farm sector to ensure food security.

“To keep farmers on farm, I hope there would be substantial step up in investment in agriculture through farm loan disbursement at four per cent,” Dr Swaminathan told PTI.

High investments in agriculture are crucial, considering growing global food crisis and uncertain climatic conditions, he said, adding that there should be incentives to grow crops such as maize, millets and sorghum.

Dr Swaminathan also expects the Budget to take steps to encourage investments in infrastructure — especially post—harvest and marketing facilities through public and private partnership.

He also hoped that the government would take initiatives to “attract and retain youth in farming” by restructuring the existing schemes like agri—clinics.

Dr Swaminathan said, “Ours is a country of young people and 70 per cent of population live in rural areas. All agri- graduates are not going to agriculture today. The schemes should be restructured to attract and retain youth in farming.”

Published on February 27, 2011

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