Urging the cooperative banks to focus on credit to bring in more areas under irrigation, Cooperation Minister Amit Shah has said that farmers’ income cannot be raised without improving the farm sector, especially irrigation.

Addressing a national conference of Agricultural and Rural Development Banks (ARDBs) on Saturday, organised by National Cooperative Agriculture & Rural Development Banks’ Federation (NAFCARD), Shah also appealed the bankers to extend more long-term loans to the agriculture sector, for both infrastructure and irrigation.

‘Needed reforms’

Pointing that ARDBs have financed more than 3 lakh tractors so far, he said the target should have been 8 crore tractors. Similarly, the target coverage of farmers under medium and long-term credit by ARDBs should have been much more than current actual penetration of about 5.2 lakh growers.

He also asked ARDBs to undertake reforms to facilitate farmers seeking long-term loan and advised them to focus the entire sector instead of looking at “bank specific reforms”. The minister directed NABARD to set up an extension wing to facilitate the process of reforms.

“Though the intention of the minister is noble, the structure of cooperative banks is such that no one at the Board level would like to take any blame in case of default as recovery in short-term credit is easy since these banks closely monitor the progress,” said a chairman of an ARDB. He also said that in many cases the long-term credit is extended due to political influence at the state level.

The minister also admitted that that there are many hurdles in providing long-term credit to the agriculture sector, but said it is time now to “overcome those hurdles with cooperative spirit” and achieve agriculture growth.

Shah said ARDBs have been functioning in the country under different names during the last nine decades and most of them operated as land mortgage banks and were first to grant long-term finance to farmers way back in 1924.

“If we look back and see the last 90 years’ journey of long-term financing through cooperatives and how it has percolated down, it has not grown,” Shah said adding India has potential to feed the whole world if the entire arable land is irrigated.

Out of net sown area of 139.42 million hectares (mh) in 2016-17, the net irrigated area was 68.65 mh or 49.2 per cent-- 15.51 mh served by canal water and 32.93 mh by tube wells. The remaining about 20 mh depends on wells and other sources for irrigation, official data show.

Database on cooperatives

The government is building a database on cooperatives for expansion of the sector, which is important for boosting farm growth and doubling farmers’ income, he said.

The minister further said that ARDBs should focus on other activities like setting up of agri infrastructure in horticulture, poultry, fishery, lift irrigation and others. “We should not run banks alone, but work towards objectives for which cooperative banks were set up,” he said.

“We don’t have a database of cooperatives at present. We don’t know how many cooperatives are working in the field of fishery and we don’t know which areas are neglected by the primary agriculture cooperative societies (PACs). We have started working on the data,” Shah said.

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