The Hindu Business Line : ‘Banks reducing exposure to small farmers’

Hyderabad, April 10 The Consortium of Indian Farmers’ Associations (CIFA), which works with Confederation of Indian Industry (CII), has alleged that the banks have diluted the objective of giving credit to priority sectors.

Mr P. Chengal Reddy, Secretary-General of CIFA, has said the banks have been consistently reducing the number of beneficiaries in the small and weaker section farmers’ segment over a period of time.

“From 2.67 crore accounts in 1992-93, the number of farmers who are eligible to get loans up to Rs 25,000 has dipped to 1.78 crore in 2005-06,” Mr P. Chengal Reddy told Business Line.

Releasing a few brochures to educate farmers on the state of agriculture and the issues they should press for when politicians come to them seeking votes, he said while 1.78 crore small farmers got loans worth Rs 22,979 crore, about 7,300 rich farmers could secure loans of Rs 50,969 crore.

“The share of small loans has been decreasing from 50 per cent in 1985 to 24 per cent in 2003 and 11 per cent in 2007,” he pointed out. There, however, was a brief period when the share went up to 59 per cent in 1990. It again slipped to 52 per cent in 1995.

He demanded that the Government publish monthly data on loans to tenant farmers. “The banks should also sanction debt swaps to take over loans taken by farmers from money lenders. They should not ask for collateral security for loans up to Rs 50,000,” he said.

Autonomy for CACP

Mr Chengal Reddy demanded that the Commission for Agricultural Costs and Prices (CACP) should be given autonomy. The minimum support price (MSP) should be at least 50 per cent more than the weighted average cost of production.

He wanted the Government to set up an Agri Risk Fund to insulate farmers from the risks of droughts and other natural calamities.

“There is a need to create commodity-based farmers’ organisations to promote decentralised production with centralised services for post-harvest management and value addition,” he said.

Mr Chengal Reddy asked the farmers to demand politicians a spend of at least 20 per cent of the Budget on agriculture. “The public investment in agriculture should be 15 per cent (as it was in 1970s) from the present level of 6 per cent,” he felt.

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