The state government’s policy reforms in restructuring of crop loans, coupled with directives to the financial institutions to extend loans to larger number of farmers, has resulted in higher disbursement of funds through the district cooperative bank for the year 2015-16. The Maharashtra State Cooperative Bank (MSCB) — the apex bank – has sanctioned Rs 7,365 crore to 25 district cooperative banks for crop loans in 2015-16.
The MSCB report indicated that the total amount released for the crop loans is 2.89 per cent higher compared to last year.
At its annual general body meeting, MSCB chairman Dr M L Sukhdeve noted there was a 20 per cent and 30 per cent growth in loan advances and deposits respectively as compared to last year.
Sources in the government however revealed there are still some shortcomings both at the administrative and financial institution levels which will have to be streamlined so as to make the mechanism of the crop loan disbursement to needy farmers smoother.
“The financial mismanagement of individual institutions cannot be equated with farmer loans or its low recovery,” added sources in ministry of cooperative and marketing.
Chief Minister Devendra Fadnavis has directed financial institutions as well as the ministry of agriculture and the ministry of cooperative and marketing to work towards bringing all the small and medium level farmers under the crop loan bracket.
Fadnavis has urged the union ministry of finance led by Arun Jaitley to also help state evolve a robust mechanism to raise its credit net so that the maximum number of farmers benefit.
Officials in the cooperative department said, “The district cooperative banks have their own share of problems which lead to their rigidity in shelling out crop loans.”
Sources have indicated that 32 lakh farmers across the state still need to pay their outstanding dues worth Rs 1200 crore to various districts cooperative banks. As a result, all these farmers cannot qualify for fresh loans.
Trying to extend financial support to the agriculture sector, the state government recently enhanced the credit crop plan from Rs 42,000 crore to Rs 54,000 crore. However, it is also trying to ensure the financial benefits accrued through his policy reforms is spread across sections, specially farmers with small and medium landholding.
Almost 78 per cent of the farmers in state have an average of 1.44 hectares land holding.
The increase in crop loan disbursement is mainly attributed to the policy initiative to restructure crop loans. The decision, which was enforced a year ago, has provided zero interest loans to farmers in the first year.
The objective was to allow the farmers to reap maximum benefits from the produce without having to worry about interest rate on the loans taken from financial institutions.
The second aspect of the policy was to extend repayment of loan from three years to five years. The longer tenure for relaying has also provided much needed breather to the farmers.