While the unions welcomed the extra NABARD fund infusion, they said that much of these loans go to large farmers and agri-businesses.
NEW DELHI: The credit support measures announced for farmers on Wednesday isn’t likely to enthuse the 14.5 crore-strong community, coming as it does in the wake of demands for full scale farm loan waivers. As part of the second tranche of Atma Nirbhar Bharat Abhiyan relief measures, Finance Minister Nirmala Sitharaman announced that additional credit support will be given to farmers through NABARD and the Kisan Credit Card facility.
Under the scheme, the national agri-financing agency NABARD will extend an additional Rs 30,000 crore of refinance support for Regional Rural Banks (RRBs) and Rural Cooperative Banks, which are the main source of credit for small and marginal farmers. “This will be on top of the Rs 90,000 crore to be provided by NABARD through the normal refinance route this year,” Sitharaman said in the presentation.
The measure will help 3 crore farmers, mostly small and marginal ones, to get enough liquidity to meet post-harvest costs for the just-ended Rabi season and sowing costs for the upcoming Kharif season, she added.
The second measure will see the government launch a special drive to provide all PM-KISAN scheme beneficiaries with Kisan Credit Cards (KCC), under which they can avail concessional loans at low interest. While around 7 crore KCCs have been issued already, another 2.5 crore cards will be issued to cover all PM-KISAN beneficiaries, the finance minister.
This move will result in an additional credit flow of Rs 2 lakh crore, she added. Fishermen and animal husbandry farmers are also to be issued KCCs.
Sitharaman did add, however, that more measures will be forthcoming for the sector going forward. “There will be more, but today I am bringing in two (measures),” she said.
Farmers unions say not enough
While Wednesday’s measures may provide some relief, farmers leaders say it is not enough. “When farmers are facing hardships finding buyers for their rabi crops and severe losses due to the disruptions in harvesting and procurement, just extending more loans does not cut it,” said Hannan Mollah, working group member, All India Kisan Sangharsh Coordination Committee (AIKSCC), and general secretary of the CPI-affiliated All India Kisan Sabha (AIKS).
He also noted that nearly 5 crore out of the 14.5 crore-strong farmer community has been left out of Wednesday’s relief measures.
Badri Narayan Chaudhary of the RSS-affiliated Bharatiya Kisan Sangh (BKS) welcomed the measures announced, including those like the affordable housing scheme and Mudra loan-related relief, saying that these will cumulatively help the rural economy. “But a few more things like this are needed,” he said.
In fact, AIKSCC, an umbrella organisation of farmers unions, had issued a statement last week calling for full loan waivers for existing KCC and crop loan accounts and interest free loans for the next season.
In a joint statement after Wednesday’s announcement, the AIKS and the All India Agricultural Workers’ Union said, “The government had claimed 14.5 crore farmers would benefit from the PM-KISAN when the scheme was announced. Only 3 crore farmers have got agricultural loans, and that is not as part of any special drive under lockdown circumstances. Only moratorium on interest till May 31, 2020 has been announced. No loan waiver or interest free loans for next season have been announced.”
While the unions welcomed the extra NABARD fund infusion, they said that much of these loans go to large farmers and agri-businesses, with banks “notoriously hesitant” to give fresh loans to farmers.
Measures taken during lockdown
Sitharaman on Wednesday also detailed the measures taken for farmers over the past two months, including the three-month loan moratorium. The minister said that three crore farmers have availed the moratorium on agricultural loans worth Rs 4.22 lakh crore.
The RBI has also extended the benefit of the two per cent interest subvention and three per cent prompt repayment incentive on crop loans by three months up to May 31, 2020. 25 lakh new Kisan Credit Cards have also been sanctioned with a loan limit of Rs 25,000 crore, while 63 lakh loans worth Rs 86,600 crore have been approved in the agriculture sector between March 1, 2020 to April 30, 2020.
NABARD has provided refinancing worth Rs 29,500 crore to cooperative banks and RRBs in March 2020. Further support of Rs 4,200 crore has been provided under the Rural Infrastructure Development Fund to states during the same month towards improving rural infrastructure.
A working capital limit of Rs 6,700 crore has also been sanctioned for state government entities involved in procurement of agricultural produce since March 2020.
