Funds for short-term crop loans cut, 10.5 lakh farmers to be hit

Sarbjit Dhaliwal

Tribune News Service

Chandigarh, July 30

The National Bank for Agriculture and Rural Development (NABARD) has imposed a cut of Rs3,400 crore on the allocation made to the state to advance short-term crop loans.

The loans are advanced twice in a year for rabi and kharif crops. At least 10.5 lakh farmers are expected to be hit hard. These loans are advanced on half-yearly basis through agriculture cooperative societies.

On an average, NABARD used to allocate Rs6,300 crore for rabi season and an equal amount for kharif season. But this year, allocation for one season has been reduced to Rs4,600 crore.

Reacting to the move, Chief Minister Parkash Singh Badal has asked Union Finance Minister Arun Jaitley to restore the original allocation of Rs6,300 crore for the rabi crop and equal amount for the kharif crop. In fact, the government had urged the NABARD to raise the allocation to Rs7,000 crore for one season.

Sources said a part of funds, which used to be allocated for crop loans, was diverted to non-farm micro-finance companies for financial inclusion. Badal has told Jaitley that the reduction of funds meant would harm the interests of the farmers as well as agriculture in the state.

The state government has argued that even the short-term crop loans promote financial inclusion as farmers owning less then one hectare of land are given loans in cash and kind by cooperative societies that avail funds from cooperative banks in the state.