Increase long-term financing to develop agriculture: Amit Shah

“Expansion can happen only when you know where to expand,” he said.

Shah said there are many obstacles but unless long-term financing is increased, agricultural development is not possible. There are many large states where banks have collapsed and this aspect also needs to be considered, he said.

He said: “Agriculture financing, be it short-term or long-term… at some places the activities are going well, at some other places it is in tatters. In a state such as Madhya Pradesh, there is no agriculture bank…neither in Bihar. We have to revive it.”

Stating that there is “no dearth of capital”, Shah said, “The infrastructure and system of financing has collapsed. We have to revive and rebuild it. Banks in every state have to identify such areas and they have to organise PACS conferences there. You can have a joint financing system with the district cooperative. You can do many things.”

Shah asked NABARD to create a wing of extension and expansion.

Emphasising the need for higher long-term financing, Shah said that 25 years ago, long-term finance constituted 50 per cent of agricultural finance, which has today reduced to 25 per cent.

“We have to think about this. The whole infrastructure has collapsed across Assam, Maharashtra, Madhya Pradesh and Odisha,” Shah said.

Highlighting lower share of cooperatives in long-term finance, Shah said agriculture and rural development banks have financed more than 3 lakh tractors, but there are more than 8 crore tractors in the country. “We have given medium- and long-term finance to about 5.2 lakh farmers out of 13 crore farmers,” Shah said.

Shah welcomed new reforms introduced by some banks but said reforms must not be bank-specific and should be for the entire sector. “If a bank does a good job, then it is the job of the federation to inform all banks about this and take it forward,” Shah said.

Stating that diversion of surplus funds towards non-agricultural use does not serve the purpose, Shah said, “The objectives of NABARD are fulfilled only when all available money is financed and refinanced in the rural development and agriculture sector. But this is not possible unless we promote long term finance, infrastructure, micro-irrigation and cooperative irrigation…. There should be focus on our expansion.”

Shah also said his ministry will convene a meeting to discuss ways to increase long-term financing.

Shah said there are challenges such as decrease in operational holdings but 50 small farmers can come together to form a cooperative to establish an irrigation project. He highlighted the lack of a database of cooperatives in the country.

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“We do not have a database on the cooperative sector, and unless there is a database, one cannot think of expansion of this sector,” he said. “How many states do not have fishermen’s cooperatives, we don’t have any data (on this). We don’t have any database of cooperatives working in the field of irrigation. How many villages are deprived of benefits of PACS, we don’t have a database of the same.”

The government, he said, has started creating a database of the cooperative sector.

Discussing increase in MSP-based procurement of foodgrain, Shah said paddy procurement has increased from 475 lakh metric tonnes in 2013-14 to 896 lakh metric tonnes today. Wheat procurement has increased from 251 lakh metric tonnes to 433 lakh metric tonnes in the last eight years, he added.

Stressing the need for revival of the cooperative sector, Shah said, “We have to revive the spirit of cooperation.”