‘Ensure institutional credit for farming sector’

Lack of institutional credit is responsible for the crisis in the farming sector despite a good crop this year, according to Mr Tapan Sen, MP.

Making a special mention in the Lok Sabha, he said two-thirds of the farming community, mostly small and marginal farmers, does not have access to institutional credit.

The need of the hour is to widen and strengthen rural credit by focusing its flow to small and marginal farmers, he said.

Terminal crisis

Farmers are faced with a terminal crisis in their livelihood. Gains in production are not accruing to producers but expropriated by the vested interests and traders-cum-money lenders.

Unfortunately, rural credit institutions — such as National Bank for Agriculture and Rural Development (Nabard) and Regional Rural Banks (RRBs) — are being weakened and their functional autonomy impaired.

As recommended by a US consultant, Nabard has closed down 15 District Development Managers’ Offices, besides putting a stop on recruitment of manpower.

Autonomy of RRBs

The Government has decided to offload its share in the RRBs to sponsor commercial banks. This will weaken the autonomy of RRBs, dilute their functional focus towards rural credit and establish the dominance of sponsor commercial bank.

This could even trigger diversion of deposits for commercial purposes, Mr Sen said. 

The Government must stop such moves of dismantling time-tested institutions for rural credit for benefiting the trade-money lender-corporate-nexus in the rural economy.

The Nabard and RRB network must be widened and strengthened with resources, enhanced manpower and greater autonomy.

The aim should be to cover the entire farming community as part of an institutional credit network, Mr Sen said.

vinson.kurian@thehindu.co.in

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