With reference to the editorial, "Fixing farm credit" (August 5), at a time when the input cost of agriculture is rising, credit should be made available at affordable rates to farmers, irrespective of their landholdings. While the target for agriculture has been raised to Rs 8.50 lakh crore and the directive to lend to farmers at 13.5 per cent will offer them some relief, it seems the credit flow to the sector is not being utilised properly.
The Pradhan Mantri Jan-Dhan Yojana has led to a rise in the number of bank accounts. Consequently, several small and marginal farmers have become financially literate and are getting access to credit for cultivation.
To ensure this trend continues, rural branches of banks have to be adequately staffed, and serve farmers with empathy. The government and banking regulators must ensure that enough institutional credit flows into the agriculture sector and eligible farmers get interest subvention.
Despite the growing penetration of banks in the hinterland, farmers prefer to approach money lenders because they are deemed ineligible by banks on account of the landholding criteria.
V S Kesava Pillai Kottayam
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