Farm credit is likely to jump by 20 per cent to Rs 4.5 lakh crore in the 2010-11 fiscal, against the government’s target of Rs 3.75 lakh crore.
The credit disbursement in the 2009-10 fiscal stood at nearly Rs 3.84 lakh crore against the target of Rs 3.25 lakh crore.
“Flow of agriculture credit is expected to exceed the target by 20 per cent in FY’11,” a senior Agriculture Ministry official told PTI.
In the first eleven months of 2010-11 fiscal, the banks had disbursed agricultural credit worth Rs 3.72 lakh crore, the official said.
Banks provide farm loans at an interest rate of 7 per cent. However, farmers making timely payments are being provided crop loan at 4 per cent interest from the current fiscal.
For the 2011-12 fiscal, the government has raised the crop loan target for banks to Rs 4,75,000 crore. “This year, banks have been asked to increase crop loan especially in seven states like West Bengal, where the government aims to achieve the second Green Revolution,” the official said.
Regional banks have been asked to form a “liability group” of upto 40 small and marginal farmers to disburse large quantum of agri-credit.
The country’s foodgrains production is expected touch a record 235.88 million tonnes in the 2010-11 crop year (July-June), as against 218.11 million tonnes in the previous year.