Centre to lower agri rates to 5% in 2 years

The Centre said it was aiming at bringing down the interest rates on agricultural loans to five per cent within next two years from the present seven per cent.

"This year we brought down this rate from 11 per cent to seven per cent. Some states like Karnataka have further reduced this to four per cent, paying the remaining three per cent from their bounty. Considering the global scenario, we hope to stabilise this rate to five per cent within the next two years," Union Agricultural Minister Sharad Pawar said here.

Speaking on the agriculture scenario in the country, Pawar said, "The Vaidynathan Committee had cited indebtedness of the farmers as one of the main hurdles in securing agri credit. Based on this report, the government has decided to clear the total backlog of Rs 14,000 crore in one stroke, paving the way for these farmers to get agri credit."

For this, he said, the Union government will bear the burden of Rs 12,000 crore while the state governments will share the remaining. The government has also asked the financial institutions to contribute a part of it.

Standing by his ministry's decision to import wheat from Australia, Pawar said, "Due to the amendments in the APMC Act the producer is no more bound to sell his product at certain APMCs. This resulted in a greater crunch for the Food Corporation of India, which failed to achieve its food stock targets despite paying a competitive price."

The government is committed to fulfill its objective of supplying food to the citizens at a cheaper rate but this does not mean that the farmers will be paid less than the market price, he said.

The decision to import wheat from Australia was taken keeping in mind the low price paid for it, as compared to domestically produced wheat for which the farmers got a better deal from traders than from the government, Pawar added.