Ramasubbareddy

Continued neglect of farm credit during 2007-08 also. The RBI has today released its Annual Report for the year 2007-08.From the data provided therein,it is observed that additional credit extended to agriculture during 2007-08 ,declined to Rs43,260crore compared to a growth of Rs56,426crore during the previous year.The growth in agri credit is less than even personal loans which are mainly for non-production purpose.It is unfortunate that credit to essential sector like farm sector is continuously decreasing and no effective measures are taken by the RBI and the Government to ensure that banks extend credit to the mandated extent of 18% of net bank credit.The figure is hovering around 15% since 2000,even after the government declared that Agriculture is their prime concern.It is another matter that a major portion increase in agri loans is on account of disproportionate increase in indirect loans and big loans of Rs one crore and above.Referring to the growth rate in agricultural credit in the last few years (after 2000) Prof.M.S.Swaminathan recently said at Chennai on the 26th Aug that "it originated primarily from a growth in indirect finance to agriculture i.e. credit given to institutions and organisations that contribute to agriculture but not the credit given directly to agriculturists.""Between 2001 and 2006, direct finance to agriculture grew at 17.4 per cent but indirect finance grew by 33 per cent, he said. Even in the case of direct finance, the major rise in direct advances happened where the credit limit was more than Rs 1 crore." He underscored the critical importance of agriculture, stating “we can’t live happily as islands in a sea of misery”. Calling farmers the guardians of national food security, he said that it was their efforts that had enabled the country to have a buffer of about 25 million tonnes of wheat and 30 million tonnes of rice.He also reiterated that "the minimum support price offered by the Government to farmers must cover their costs and offer at least 50 per cent more as against the current levels of 15 per cent above cost price"We urge upon the RBI and the Government to ensure that credit is extended to essential farm sector to the extent of 18% of total credit and Agri prices are fixed as recommended by the NCF headed by Prof.M.S.Swaminathan.Continued neglect of credit and underpricing of agri produce is not in the interests of the nation's food security.
Labels: Continued neglect of farm credit even during 2007-08