Lok Sabha Question No. 1758 (UNSTARRED), answered on 2018-03-06
Subject: Agriculture Loans
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: PARAYAMPARANBIL KUTTAPPAN BIJU

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE, COOPERATION AND FARMERS WELFARE

## LOK  SABHA UNSTARRED QUESTION NO.1758

TO BE ANSWERED ON THE  6 TH  MARCH, 2018

## AGRICULTURE LOANS

1758.  DR. P.K. BIJU:

Will  the  Minister  of  AGRICULTURE  AND  FARMERS  WELFARE      ‡ãðŠãäÓã एवं  कसान कयाण ½ãâ¨ããè be pleased to state:

- (a) whether small farmers are still taking sixty per cent of their agriculture loans from moneylenders, shopkeepers and traders;
- (b) if so, the details thereof and the response of Government thereto;
- (c) the corrective measures taken by Government in this regard; and
- (d) whether the Government has any plan to waive the farmers loan and if so, the details thereof?

## ANSWER

MINISTER OF  STATE IN THE  MINISTRY OF  AGRICULTURE AND  FARMERS  WELFARE

‡ãðŠãäÓã एवं  कसान  कयाण ½ãâ¨ããÊã¾ã  ½ãñâ  Àã·¾ã  ½ãâ¨ããè (  SHRI PARSHOTTAM RUPALA)

- (a) & (b): The activity of money lending is regulated by State-specific money lending laws.    The  National  Sample  Survey  Office  (NSSO)  conducted  Situation  Assessment Survey  (SAS)  of  Agricultural  Households  during  NSS  70 th round  (January,  2013December 2013) in the rural areas of the country for reference period of the agricultural year July 2012- June 2013, which reveals the following:-

About  52%  of  the  agricultural  households  in  the  country  were  estimated  to  be indebted. At all India level, about 60 percent of the outstanding loans were taken from institutional sources which included Government (2.1%), Co-operative society (14.8%) and  Banks  (42.9%).  Among  the  non  institutional  sources,  agricultural/  professional money lenders (25.8%), shopkeepers/traders (2.9%), employer/landlord (0.8%), relatives  and  friends  (9.1%)  and  others  (1.6%)  who  accounts  for  about  40%  of outstanding loans would not be eligible to get any benefits from debt waiver scheme. The  average  amount  of  outstanding  loan  per  agricultural  household  was  Rs.47000/(approx.).

(c): Government has taken several measures to increase institutional credit flow and bringing more and more farmers including small and marginal farmers within the fold of institutional  credit.    These  measures  inter  alia,  include  the  following  major  steps  to provide hassle free crop loan to farmers including small and marginal farmers:-

## Interest Subvention Scheme

Under  the  Interest  Subvention  Scheme,  during  2017-18,  the  Government  is providing  short-term crop loans upto Rs.3 lakh for a period of one year to farmers at a sub-vented  interest  rate  of 4 %  per  annum  in  case  of  prompt  repayment  of  the  loan against  the  normal  lending  rate  of  9  %.  Thus  on  prompt  repayment  the  farmers  get Interest Subvention of 5 % per annum.

Further, in order to discourage distress sale of crops by farmers, the benefit of interest  subvention  has  been  made  available  to  small  and  marginal  farmers  having Kisan Credit Card for a further period of up to six months (post- harvest) at the same rate as available to crop loan against negotiable warehouse receipts to store their post harvest  produce in Warehouses accredited  by Warehousing Development Regulatory Authority (WDRA).

## Specific target for Small and Marginal Farmers

As  per  RBI  directions  on  Priority  Sector  Lending,  a  target  of  18  percent  of Adjusted Net Bank Credit (ANBC) or Credit Equivalent of Off-Balance Sheet Exposure (CEOBE), whichever is higher, has been prescribed to Domestic Scheduled Commercial Banks for lending to Agriculture, within which, a sub-target of 8 percent of ANBC or CEOBE, whichever is higher, has been prescribed for lending to Small and Marginal  Farmers.  Similarly,  in  the  case  of  Regional  Rural  Banks  18%  of  their  total outstanding advances are required to be towards agriculture, within which 8% of total outstanding advances has been set for lending to small and marginal farmers.

## Kisan Credit Card (KCC) Scheme

Kisan  Credit  Card  Scheme is  aimed  at    providing  adequate  and  timely  credit support  from  the  banking  system  under  a  single  window  to  the  farmers  for  their cultivation and other needs. In terms of master circular dated July 03, 2017 of Reserve Bank of India, tenant farmers, oral lessees or share croppers are also covered under the KCC Scheme. Under the Scheme, a flexible limit of Rs.10,000 to Rs.50,000 has been provided to marginal farmers (as Flexi KCC) based on the land holding and crops grown including post harvest warehouse storage related credit needs and other farm expenses, consumption needs, etc., plus small term loan investments without relating it to the value of land.

In terms of the extant guidelines to banks, margin/ collateral for agricultural loans up to Rs.1 lakh is not required.

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## Guidelines for Financing of Joint Liability Groups (JLGs) of 'Bhoomi Heen Kisan'

In terms of Union Budget 2014-15 it had been declared that 5 lakh Joint Liability Groups  (JLG)  of  'Bhoomi  Heen  Kisan'  will  be  financed  through  NABARD.  RBI  has issued guidelines to all scheduled commercial banks in this regard vide circular FIDD. CO.FSD.BC.42/05.02.02/2014-15 dated November 13, 2014. One of the main objectives of  financing through JLGs is to  augment flow of credit to landless farmers cultivating land as tenant farmers, oral lessees or share croppers and small / marginal farmers as well as other poor individuals taking up farm activities, off-farm activities and non-farm activities. As on 31 st March, 2017, cumulatively 24.53 lakh Joint Liability Groups (JLGs) have been provided Rs.26,848.13 crore loan by banks across the country.

## Agriculture Ground Level Credit flow for Small and Marginal Farmers

The  share  of  Small  and  Marginal  Farmers  (SMFs)  accounts  in  total  number financed by all agencies grew from 60.07 per cent in 2015-16 to 72.06 per cent in 201617.    More  importantly,  in  terms  of  amount  disbursed,  the  share  of  SMFs  grew  from 41.51  per  cent  (in  2015-16)  to  50.14  per  cent  (in  2016-17).  In  actual  terms,  the  agri credit disbursement towards SMFs grew from Rs.3.80 lakh crore in 2015-16 to Rs.5.34 lakh crore in 2016-17, while the number of SMF accounts grew from 5.40 crore to 7.71 crore during the same period.

(d): At  present,  there  is  no  proposal  under  consideration  of  the  Government  on waiver  of the farmer's loan.

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