Karnataka to disburse Rs 3,600 crore farm loan

The Karnataka government intends to disburse Rs 3,600 crore as farm loan at 4 per cent interest rate to 14 lakh small and marginal land holding farmers in the 2006-07 financial year.

Announcing this at a news conference here on Tuesday, Karnataka's agriculture minister Bandeppa Kashampure pointed out that the farm loan will be disbursed through the credit cooperative societies.

The government, in its budget for 2006-07, had announced the disbursement of farm loans at a low interest rate of 4 per cent to assist farmers in distress.

"The National Bank for Agriculture and Rural Development (Nabard) has agreed to finance the programme to an extent of Rs 886 crore. The amount will be released by the Nabard to the farmers through the district cooperative banks soon," the minister added.

The upper limit for borrowing the loan has been fixed at Rs 3 lakh per farmer. Last year, there was no such ceiling. "In 2005-06, approximately 90 per cent of the farmers had borrowed Rs 1 lakh.

Another 9.20 per cent farmers had borrowed loans between Rs 1 lakh and Rs 2 lakh. Only about 0.8 per cent of the farmers had borrowed Rs 3 lakh," Kashampure stated.

The government has not laid down any special conditions for borrowing. "However, farmers, who are habitual defaulters, cannot get loans," he pointed out.

In 2004-05, the farm loan disbursed was Rs 1,300 crore. In 2005-06, it was enhanced to Rs 4,700 crore.

"This year, it has been pegged at Rs 3,600 crore on account of good rainfall last year. This year too, normal monsoon has been predicted for the state. We may increase our target depending on the situation," he said.

On the Centre's plan to offer farm loan at 7 per cent interest rate, the minister said the state government has not received the guidelines so far. "I am told that the Centre is still in the process of evolving the guidelines. We have forwarded our recommendations on evolving the guidelines," he stated.

The minister said the state may experience shortage of DAP fertiliser owing to price fluctuation in the international market.

"This is a nationwide problem and the Centre has been apprised of the situation. The state has set aside Rs 25 crore for purchase of fertilisers," he added.