Lopsided policies have made agriculture economically unviable. With growth fluctuating between one and two per cent, financial institutions are not lending to farmers
Are banks abandoning farming? While the government has beenstressing on the importance of the sector, lenders seem uninterested. Speakingto ‘The Goan’ farmers complain. Abank is willing to give a home or a car loan immediately. Ask for a farm loan,and you will be kept waiting for months. Bankers are not serious about lendingto the farm sector.
Take for instance, Pritam Patil, a farmer from Ponda. He hadapplied to the State Bank of India for a loan of Rs 35 lakhs in 2011, for a mushroomproject. The project is expected to produce 200 to 300 kgs of mushrooms daily.One and a half year later he is still waiting for the loan to be sanctioned.
Patil said, “I gave the bank a security of Rs 42 lakhs andwas ready to give additional security too. Despite fulfilling all the criteria,my papers have yet not been moved.” The Indian Council of Agriculture Research(ICAR) conducted the technical viability test, and the bank the financialviability. Both the reports went in his favour. “They are neither turning itdown nor sanctioning the project. The only answer we receive is that it is inthe pipeline,” he shares.
When asked, a senior banker at a leading bank said,“Agriculture is an inconvenient necessity. Not only are bad loans in the sectorhigh, but the amounts offered are very low. Our risk is not adjusted well. Not to mentionthe ever-present risk of waivers.”
But banks have to meet the Reserve Bank of India (RBI) ruleson priority-sector lending. The RBI mandates banks to give at least 18 per centof their total loans to agriculture. Failure to do so invites the RBI’sdispleasure.
In Goa more than 80 percent farmers are small andmarginalised with land holdings of one hectare and less. April-May areimportant months for farmers. This is the time they organise money to buy seedand fertilisers to plant during monsoons. Bank loans should surge during thisperiod however data shows otherwise. According to NABARD, the number of loans2011-12 has decreased by 2% from the preceding year which was from Rs.1754.06 crores in 2010-11 to Rs 1721.87 crores.
According to N P Singh, ICAR Goa, Director, “There is a hugegap between lending agencies and farmers.”
So then how do banks meet their lending targets? Sources said,“Banks, are showing loans given against gold as farm credit.”
But if the government wants to achieve six per cent targetin agriculture and its allied sectors, it will have to as commercial and cooperativebanks to step up farm credit.
