Credit flow to agriculture remained high in South India, while it was the least in North-Eastern States due to lack of awareness on existing schemes, says an Assocham study.

The study ‘Agriculture credit in India’ shows that poor awareness about existing crop loans deprived small and marginal farmers, including tenant farmers and share-croppers, from obtaining agricultural credit not only in the North-Eastern region, but also eastern and western parts of the country.

“Credit flow to farmers from banks in Karnataka, Andhra Pradesh, Tamil Nadu and Kerala is higher than other States. There is increased awareness about farm credit because of the initiative taken by the Government and banks,” the industry chamber said in a statement.

disbursement

In South India, farm credit disbursement stood at Rs 1.84 lakh crore in 2010-11 against Rs 1.12 lakh crore. Similarly, in the North, credit flow to farmers increased to Rs 1.15 lakh crore from Rs 84,342 crore in the same period.

In the North-East, credit flow remained at Rs 4,620 crore in 2010-11, the lowest when compared with other parts of the country.

In western and eastern India, it stood at Rs 62,804 crore and Rs 38, 261 crore, respectively, in 2010-11.

Credit flow to farmers in South and North India is expected to be higher even in the current fiscal taking into account the past trend, Assocham said. According to the report, credit flow to small and marginal farmers has been increasing in the last few years, but assistance to tenant farmers (including share-croppers, oral lessees) by the formal financial sector need to be scaled up to achieve higher growth in agriculture.

Credit flow to tenant farmers has been negligible even though banks are allowed to give credit up to Rs 1 lakh by taking a declaration from Gram Sabha, the report said.

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