Agri Business

Karnataka Govt to extend loans to silk reelers at 3%

Our Bureau Bangalore | Updated on February 01, 2011

The State Government has extended the scheme of giving loans to silk reelers through cooperative institutions and nationalised banks at 3 per cent rate of interest.

Addressing presspersons here on Friday, Minister for Sericulture and Labour, Mr B.N. Bache Gowda, said silk reelers can avail the loans from nationalised and cooperative banks at the rate of 3 percent in the current fiscal year.

A notification to this effect was issued recently and a total 5,388 small and marginal reelers are eligible to obtain loans.

The Government would reimburse the difference in the rate of interest.

The banks would charge 9 per cent rate of interest on loans. But the farmers would need to pay only 3 per cent rate of interest.

The Department has set aside Rs 1 crore to reimburse the difference in the rate of interest. The Department had discussed the issue with the bankers and issued the notification inviting applications from reelers seeking to avail loans, he said.

Farmers, weavers and fishermen have already been availing loans at 3 per cent rate of interest. The Central government has given an agricultural status to those involved in mulberry cultivation and cocoon rearing.

However, the silk reelers and traders come under the silk industry category, he said.

The State government has given a proposal to the Centre to avail Rs 5 crore from the Rastreeya Krishi Vikas Yojana (RKVY) in the coming financial year.

The fund would be utilised for the benefit of the sericulture farmers, the Minister said. A total of 1.12 lakh farmers are involved in mulberry cultivation in the State and the crop covered 1.35 lakh acres.

About 40,000 acres would be added to the existing area by 2011-12.

Farmers would be given a support price of Rs 5,000 per acre if they brought new area under the crop.


Currently, cocoons traded at Rs 300-325 for a kg while the bivoltine variety fetches Rs 340-375/ kg. The State's annual cocoon production stood at 55,000 tonnes and annual silk production is 8,000 tonnes, which constituted 50 per cent of the country's production.

However, the State was facing shortage of 1,500 tonnes of silk a year, he said.

As a one-time settlement, the Government has decided to waive interest on loans on the amount up to Rs 1 lakh borrowed by reelers.

A total of 1,385 reelers (Rs 5.25 crore) are eligible to benefit under the scheme.

The Minister said Rs. 60 lakh had been set aside for upgradation of cocoon markets in Ramangaram, Kolar, Chickballapur, Tumkur and Mysore districts.

Published on January 28, 2011

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