Lok Sabha Question No. 2378 (UNSTARRED), answered on 2018-01-02
Subject: Institutional Credit to Small Farmers
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: KINJARAPU RAM MOHAN NAIDU

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

## LOK  SABHA UNSTARRED QUESTION NO. 2378

TO BE ANSWERED ON THE 2 ND  JANUARY, 2018

## INSTITUTIONAL CREDIT TO SMALL FARMERS

2378.  SHRI RAM MOHAN NAIDU KINJARAPU:

Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ ष एवं कसान कयाण मंी be pleased to state:

- (a) the  steps  the  Government  is  taking  to  bring  all  farmers,  especially  the  small  and marginal farmers, into the fold of institutional credit;
- (b) the details of the performance of Joint Liability Groups in this respect; and
- (c) the  details  of  small  and marginal farmers who  have been successful in availing credit through  Joint  Liability  Groups  in  the  country,  especially  in  States  of  Andhra  Pradesh  and Telangana?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF AGRICULTURE AND FARMERS WELFARE

कृ ष एवं कसान कयाण मंालय म राय मंी (SHRI PARSHOTTAM RUPALA)

- (a): Government  has  taken  several  measures  to  increase  institutional  credit  flow  and  to bring more and more farmers including small and marginal farmers within the institutional credit fold.  These measures, inter alia, include the following major steps to provide hassle free crop loans to farmers including small and marginal farmers:-
- i). Under  the  Interest  Subvention  Scheme  (ISS)Short  Term  Crop  loans  upto Rs.3 lakh are extended to farmers at a subvented interest rate of 7% per annum for a period  up  to  one  year.  In  case  of  prompt  repayment,  the  farmers  can  avail  a  prompt repayment  incentive  of  3%  per  annum  and  thus  the  effective  rate  of  interest  on  such loans is only 4%.
- ii). The ISS also provides for post harvest loans for up to 6 months at the same rate of  interest  as Short Term Crop loans to Kisan Credit Card holding Small and Marginal Farmers, to encourage them not to resort to distress sale and instead store their produce in Warehouses accredited with Warehousing Development Regulatory Authority (WDRA) against Negotiable Warehouse Receipts (NWR).
- iii). Reserve Bank of India (RBI) has issued Priority Sector Lending Guidelines (PSL), which  mandate  all  Domestic  Scheduled  Commercial  Banks  to  earmark  18%  of  their Adjusted  Net  Bank  Credit  (ANBC)  or  Credit  Equivalent  amount  of  Off-Balance  Sheet Exposure (OBE), whichever is higher, as on the corresponding date of the previous year, for lending to Agriculture. Within the 18 percent target for agriculture, a sub-target of 8 % for small and marginal farmers has been fixed to help in increasing the flow of credit to small and marginal farmers.

iv).   As per PSL guidelines loans to distressed farmers to repay non-institutional lenders are eligible  under  priority  sector.  Besides  loans  to  stressed  persons  (other  than  farmers)  not exceeding Rs. 1,00,000/- per borrower to repay their debt to non-institutional lender are also eligible for the purpose of priority sector lending by banks.

v).   The Government implements the Kisan Credit Card (KCC) Scheme   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  RBI,  tenant  farmers,  oral  lessees  or  share  croppers  are  also  covered  under  the  KCC Scheme.  The Scheme provides for sanction of the limit for 5 years with simplified renewal every  year.  All  the  banks  have  been  advised  to  implement  the  scheme.  The  issue  of smart -cum debit card, mandated under the revised guidelines, is enabling the farmers to access multiple delivery channels.

vi).  To bring small, marginal, tenant farmers, oral lessees, etc. taking up farm activities, offfarm activities and non-farm activities, into the fold of institutional credit, Joint Liability Groups (JLGs) have been promoted by banks. The announcement of Union Budget for 2014-15 for financing  of  5  lakh  JLGs  of  'Bhoomi  Heen  Kisan'  (landless  farmers)  has  given  further credence to efforts  of  National  Bank  for  Agriculture  and  Rural  Development  (NABARD)  in innovating and reaching out to the landless farmers through JLG scheme of financing.

vii).  Banks have been advised by RBI to waive margin/security requirements of agricultural loans upto Rs.1,00,000/-, vide RBI's circular dated 18 th June, 2010.

viii).  RBI  has  issued    directions  for  Relief  Measures  to  be  provided  by  respective  lending institutions in areas affected by natural calamities which, inter alia, include, restructuring/rescheduling  of  existing  crop  loans  and  term  loans,  extending  fresh  loans, relaxed  security  and  margin  norms,  moratorium,  etc.  These  directions  have  been  so designed that the moment calamity is declared by the concerned District Authorities they are automatically  set  in  motion  without  any  intervention,  thus  saving  precious  time.  The benchmark for initiating relief measures by banks has also been reduced to 33% crop loss in line with the National Disaster Management Framework.

(b) & (c): 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.  In Andhra Pradesh, 1,82,375 JLGs have availed loans of Rs.1,618.05 crore and in Telangana, 35,748 JLGs have availed  bank  loans  aggregating  to  Rs.620.94  crore,  as  on  31 st March,  2017.    The  details  of small  and  marginal  farmers  availing  loan  through  JLG  mode  of  financing  is  not  maintained separately.

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